Economic Analysis

March 2014

Big Picture observations on Amarillo’s economy center on slowing but still positive growth, higher commodity prices, and solid construction numbers. Amarillo’s economic pace slowed down in March as retail sales lagged, employment slowed and the drought hardened. Retail sales were down 2% from 12 months ago and year to date up only 3.6%.

The household survey shows there are 200 more people working in Amarillo than last year. While the Household survey (including part time) is down 100. Wages were up 2%, slightly higher than the 1% rate of inflation.

New car sales were up 3% and used car sales are up 5%. Airline boarding’s finally turned positive compared to 12 months ago and the motel tax is up 16%.

Building permits are up with roofing still 1/3 of the total, and $5 million in commercial and $1.5 million in office. Residential starts are up 37% even as mortgage rates are nearly a full point higher than last year.

Crops will be hurt by the lack of rainfall. Wheat is expected to have another bad spring and prices are down 4% from 2013. Cotton prices are flat with last year and peanuts might replace some cotton planting as it brings higher yields. Corn prices are down 38%, which will benefit area dairies and feedyards. Beef and Dairy are both doing very well with Milk prices up 24% and fat cattle up 13%.

A bright spot for the Panhandle is the run up in Natural Gas prices. They were over $6 for a week (which a few years ago was an impossible thought) and that is up 67% from last year and the average is up $1 from last year at $4.60.

Oil prices are up 12%. There are 71 drilling rigs in the Panhandle which is 1 higher than last year.

Amarillo’s Leading Economic Index is sharply negative for this month (which probably off sets last month’s big jump). Thus the last 3 months are about flat which implies four months from now will bump along at the same levels as we are seeing now.

*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.