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Amarillo Economic Forecast for 2024

2023 Recap

Slowing, but steady growth for Amarillo in the face of higher interest rates and inconvenient rains. Ag and oil contributed less; however, cattle had a fine year. Job growth and retail sales increases slowed to about 1.5%, while tourism was mixed.

Areas of Economic Strength

  • 2,000 more people working
  • Higher wages and salaries
  • Jump in airline boardings
  • Higher interest rates helped savers
  • Commercial construction remained robust
  • Amarillo’s population exceeded 200,000

Areas of Economic Weakness

  • Higher rates hurt housing and auto sales
  • Tourism slowed
  • Farm commodity prices and yields declined
  • Even dairy had a poor year
  • Housing starts declined
  • Slumping prices for oil and especially natural gas

2024 Forecast

  • Continued flattening, while avoiding a recession
  • Commodity prices should hold or increase
  • Lower rates will help housing, auto sales, and business expenses
  • Federal government largesse will decline
  • Higher insurance costs will offset lower gasoline prices
  • Inflation pressures continue to ease
  • Student loan payments resuming will add more pressure to consumers

Outlook for Specific Sectors

Employment

2023 had less job growth, but incomes increased at levels near the rate of inflation. Owens Corning had a November layoff. 2024 has no major job changes or major new employers on the horizon.

12 Month Average 2017 2018 2019 2020 2021 2022 2023 2024 (est)
Household Survey 129,300 129,667 129,339 122,155 127,228 130,509 133,106 131,000
Employers Survey 123,200 121,950 121,184 116,353 120,714 124,350 127,525 125,000
Average Unemployment 2.20% 2.70% 2.50% 4.80% 4.13% 2.93% 3.13% 3.00%

Retail Sales

2023 Retail sales increase dropped below the rate of inflation, as consumers cut back and higher interest hurt large purchases. 2024 should see increases slightly below the rate of inflation, as moderate job and wage growth generates more disposable income.

Sales Tax Collections 2017 2018 2019 2020 2021 2022 2023 2024 (est)
Amount $74,177,530 $77,261,171 $78,934,689 $81,094,099 $91,925,630 $99,980,813 $100,432,055 $101,500,000
% Change -0.003% 4.16% 2.17% 2.74% 13.35% 8.77% 0.45% 1.10%

Consumer Price Index

CPI Increases 2017 2018 2019 2020 2021 2022 2023 2024 (est)
Amarillo 0.97% 2.90% 2.00% -1.23% 6.29% 9-11% 8.79% 4.00%
National 2.20% 2.20% 2.10% 0.20% 6.80% 8.50% 4.39% 3.80%

Real Estate

Pent up demand slowed the drop in housing starts caused by the doubling of mortgage rates. Home prices of new and existing increased modestly. Apartment rent softened. Meanwhile, commercial construction stayed very strong, boosting building permit totals. 2024 will have slower new home construction, since job growth is modest. Commercial projects will stay robust. Home prices should be near flat, as mortgage rates are now lower by 1% at year-end.

Building Permits 2017 2018 2019 2020 2021 2022 2023 2024 (est)
Housing Starts 477 505 520 666 746 971 923 700
Remodels & Roofing 5,041 3,176 5,057 4,512 4,114 1,356 5,869 2,000
Commercial Units 506 415 418 267 381 690 874 900
Total Value (mil) $686 $472 $332 $494 $961 $530 $392 $340
Median House Value (000) $159 $155 $180 $200 $220 $235 $240 $246

Agri-Business

2023 had poor moisture timing and lower commodity prices, as farmers suffered a one-two punch. Dairy had the first tough year in years. Cattle boomed, bucking the Ag Trend. High cattle prices should correct some in 2024, while dairy and farming should see stronger prices. As always, rain will determine yields. Cotton production was off 50%+ in 2023 and should improve from the low levels. Current prices are lower than 2023 YTD averages shown here.

($  Average) 2017 2018 2019 2020 2021 2022 2023 2024 (est)
Wheat $3.68 $4.73 $4.30 $4.71 $7.00 $9.55 $7.30 $6.50
Fed Cattle $121.50 $116.11 $115.71 $109.10 $121.29 $143.50 $174.37 $173.00
Corn $3.67 $3.89 $4.07 $3.85 $5.66 $6.91 $5.60 $5.50
Cotton $67.80 $69.65 $66.76 $58.56 $71.41 $93.51 $78.51 $80.00
Milk $15.94 $14.28 $16.25 $17.57 $ 16.76 $21.79 $17.58 $16.75

Energy

Natural gas prices plummeted during 2023, while oil was “up and down” ending the year lower. Strong production will keep 2024 prices low resulting in lower transportation costs, reducing inflation rates. Drilling rigs are more efficient, so less rigs are needed in our area both for new horizontal wells and workovers.

Yearly Average 2017 2018 2019 2020 2021 2022 2023 2024 (est)
Active Rigs 15 22 10 2 5 8 5 4
Oil (Panhandle) $47.50 $64.43 $58.17 $39.63 $68.43 $94.83 $77.90 $74.00
Natural Gas $3.13 $2.94 $2.68 $2.13 $3.65 $6.46 $2.68 $2.60

Travel

Airline boardings jumped early in 2023 and continued strong, as more local passengers traveled. Hotel occupancy rates dropped 3%, while Bed Tax declined 15% due to AirBNB and extended stays hurting tax receipts. 2024 Airline boards should be up slightly, while the Bed Tax should be up 3%, as more rooms are coming on line and room rates will be under pressure.

Travel 2017 2018 2019 2020 2021 2022 2023 2024 (est)
Airline Boardings 342,709 360,762 366,640 232,585 298,220 365,983 399,299 412,000
  -1.62% +5.26% +1.63% -36.56% +28.00% +22.70% +9.10% + 3.50
                 
Motel Tax 6,611,065 6,962,730 7,193,818 5,467,228 8,717,588 9,381,000 9,289,524 9,100,100
  -3.03% +5.31% +3.32% -24.00% +59.45% +7.61% +0.975% + 2.04%

Bankruptcy Filings

Less Covid payments should reverse the 3-year downtrend.

Bankruptcy 2017 2018 2019 2020 2021 2022 2023 2024 (est)
Filings 426 439 417 328 297 240 284 310

Amarillo Leading Indicators

We do not forecast this, as the formula looks six months ahead. December was slightly negative.

Amarillo Leading Indicators 2017 2018 2019 2020 2021 2022 2023 2024 (est)
Annual Average -1.40% -5.60% -11.67% 1.50% 2.92% 4.77% 8.79% We do not forecast this, as the formula looks six months ahead.December was slightly negative.