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Economic Analysis

April 2016

Housing and job growth are the bright spots for the Amarillo economy- a good connection.

Retail sales are up 1.5% from 12 months ago and are up 1.12% year to date. Year to date, Lubbock is flat with 2015 and Midland/Odessa is down 20%.

New car sales are down 5% and used car sales are up 23%.

Low gasoline prices and higher room rates have helped our Hotel/Motel tax go up 54% from a year ago. Our airline boardings are down due to flights and higher prices for airline travelers.

Employment levels are up in Amarillo. The Employer’s Survey shows a gain of 1,400 and the Household Survey is up 2,100. Lubbock is up 4,400 in Employers Survey and 3,900 in Household Survey.

Real Estate is mixed. Commercial construction permits are down 17% from last year but our construction in progress (6 months total) is up 38% from 2015. Low interest rates and low inventory of homes are driving the 75% increase in housing starts. Existing homes sales are at high levels helping boost the residential sector.

Energy prices are mixed. Oil is down only 18% but up from the beginning of the year. Natural gas prices are down 30% from a year ago. Gas accounts for 60% of Panhandle production. There are only 6 drilling rigs operating in the Panhandle this month (down from 80 at the peak!)

Recent rains get us off to a good start for summer and shouldn’t hurt the spring harvest. Wheat prices are down 21%, corn is down 11% and cotton is flat with a year ago but all have stopped their fall.

Fat cattle are at $133, down 18% from a year ago. Feedyards are still seeing losses of $150 per head. Milk prices are down 14%, but still barely above breakeven.

Amarillo cost of living is down 2% for the year. Utilities’ being down 6% brings down the basket of goods. Healthcare and housing costs are flat and grocery costs are up 1.4%. These low levels of inflation ameliorate the wages gains of only 1% over 12 months ago.

 

April 2016Current MonthLast MonthLast Year

Index*

188.06

165.80

198.60

Sales Tax Collections

$5,467,120

$5,312,076

$5,387,229

Sales Tax Collection-YTD

$24,484,405

$19,017,284

$24,211,342

New Vehicle Sales

1,134

952

1,205

Used Vehicle Sales

3,913

3,450

3,157

Vehicle Registrations (Stickers)

19,837

20,321

19,317

Airline Boardings

24,712

24,388

27,256

Hotel/Motel Receipt Tax

$593,602

$389,152

$384,435

Population - Corporate Amarillo

191,514

191,514

191,514

Employment - CLF

131,400

129,300

129,937

Unemployment Rate

3.00%

3.00%

3.80%

Total Workers Employed (Household Survey)

127,500

125,400

126,100

Total Workers Employed (Employers Survey) 

119,500

118,100

117,400

Average Weekly Wages

$789.67

$789.67

$779.35

Gas

62,661

62,556

62,583

Water Connection

69,385

69,442

69,136

Interest Rates: 30 Year Mortgage Rates

3.75 %

3.88%

3.88%

Building Permits Dollar Amount

$48,331,002

$40,120,201

$50,005,560

Year to Date Permits

$114,185,535

$65,854,532

$137,139,372  

Residential Starts

27

27

32

Year To Date Starts

117

61

86

Median House Sold Price

$155,000

$145,000

$144,000

Drilling Rigs In Panhandle

 6

10

21

Oil Price Per Barrel

$35.56

$25.56

$43.57

Natural Gas

$1.92

$1.97

$2.73

Wheat Per Bushel

$4.07

$3.98

$5.16

Fed Cattle Per CWT

$133.00

$138.00

$162.00

Corn Per Bushel

$3.65

$3.78

$4.10

Cotton (Cents Per Pound)

$57.20

$58.00

$57.40

Milk

$14.30

$14.40

$16.00

 *Base-100, January 1988

 

Economic Growth in Amarillo

Amarillo’s economic prosperity depends on growing primary jobs. The Amarillo Economic Development Corporation was established in 1989 to perform this function. It has done an outstanding job over the years, and most of the recent growth in Amarillo is attributable to the AEDC. The primary jobs then generate secondary and service jobs.

Amarillo’s 1912 city charter had a small percent of the tax base dedicated to the "Board of City Development". In the 1970’s several private efforts were made to promote industrial development. They were unsuccessful because of their small size and lack of competitive incentives. In 1983 the Amarillo Chamber of Commerce was reorganized with a strong "Board of Economic Development". The most visible business leaders in town participated in this upgraded effort, but the lack of funds for incentives cut its effectiveness.

Thus, a public vote in 1989 established the AEDC and a half-percent sales tax to fund it. This has proved to be highly successful, and was later copied by other cities. We had a several year head start on some of our competing cities, who were slow to the market. Now most cities have an organization similar to this.

The State has allowed different types of Economic Development Boards, if cities choose a "Type B" option. This allows the sales tax money to be used for a broad range of civic functions, including sewers, parks, entertainment, tourism and even affordable housing. This Type B organization eviscerates economic development efforts and could render Amarillo economic development as non-competitive. We are very fortunate that we have the highest form of economic development with our Type A, which has allowed us to be successful. Type B would demote us to a 2nd rate status.

  

This document was prepared by Amarillo National Bank on behalf of itself for distribution in Amarillo, Texas and is provided for informational purposes only. The information, opinions, estimates and forecasts contained herein relate to specific dates and are subject to change without notice due to market and other fluctuations. The information, opinions, estimates and forecasts contained in this document have been gathered or obtained from public sources believed to be accurate, complete and/or correct. The information and observations contained herein are solely statements of opinion and not statements of fact or recommendations to purchase, sell or make any other investment decisions.

 

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