Amarillo’s economy continues to grow, although the growth in jobs and retail sales have slowed down. Housing is having a record year, and that will help out jobs in the short term.
Amarillo added 1,400 jobs in the Household Survey, but only 100 jobs in the Employers’ Survey. The Household Survey tends to be more accurate when the economy is on more solid footing, and the Employers’ Survey is impacted by annual adjustments. Lubbock is showing job growth of over 4,000 from a year ago, and Midland/Odessa has grown around 9,000 over the same time.
Retail sales in Amarillo are up for the year. Stronger employment along with a 4% increase in wages bring this number up. We aren’t seeing inflation (yet), but will be watching prices going forward.
Real Estate is booming in Amarillo, with both commercial and residential construction seeing activity. Larger projects around town include a new hotel on I-40, a car wash on Georgia and an office building in the Colonies. Year to date permits are up 18%. There were 109 (+5%) more houses sold in the first half of 2018 compared to 2017.
Area agriculture had a terrible first half of 2018. The drought hit farmers the hardest and most of the dryland crops were considered failed by insurance companies and anything left is way behind schedule. Rains in June alleviated some concern for the corn crop, but it isn’t looking good. Cotton prices are down 10%. Wheat prices are up 21%.
Feedyards are operating just under breakeven, even with lower input costs. Feeder cattle cost more going into feedyards. Fat prices are down 5% from a year ago.
Dairies continue to breakeven and milk production has increased for 41 straight months.
We believe that Washington D. C’s tough talk on trade and placement of tariffs will have a negative impact on the Panhandle economy. An oversupply of commodities and the lack of demand due to tariffs will effect ag commodities. This could cause some food deflation. The opposite will occur with manufacturing, as high steel prices (from the tariffs) and tight labor markets could cause rising prices.
*Base-100, January 1988
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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