Posted on 09/02/2014 5:10:34 AM PDT by thackney
The impact of higher oil and gas activity, fueled by a run-up in crude prices, continued to flow into the general economies of Midland and Odessa in July.
Karr Ingham, the Amarillo economist who prepares the Midland-Odessa Regional Economic Index for Midland Development Corp. and Security Bank, said the July index is 6.2 percent higher than the previous July. This is a higher increase than June, which was 5.8 percent above June 2013 levels.
Ingham said the increased momentum comes at a time when the Midland-Odessa economy had been reporting shrinking growth rates.
“It’s not like we were really seeing a slowdown or any such thing, but we were seeing a cooling off of the growth rate,” he said.
Even without the added momentum, the area would have seen strong economic numbers, he said.
“This surge in oil and gas activity from higher prices didn’t take long to turn up in the overall economy,” he said.
All components of the index were positive in July, with record-setting results seen in some sectors, Ingham said. One of the primary components, employment, has gained strength, Ingham said. Job creation was 5.4 percent compared to last July. That compares to growth rates of just under 4 percent at the end of 2013, he said.
A second primary component, consumer spending, surged 13.2 percent compared to last July. For the year it is up 10.5 percent compared to the first seven months of 2013, he said.
Automotive spending, after settling into single-digit growth rates in 2013, has jumped. July spending is up 20.4 percent over last July and 2014 spending is up 15.3 percent compared to 2013.
Ingham said Midland-Odessa likely won’t see building valuations exceed $1 billion this year as it did in 2013, but numbers are surprisingly strong. Though July valuations are 41.3 percent above last July, they are down 10.3 percent so far this year, compared to the first seven months of 2013. Still, he said July’s valuation total of $153.5 million is the highest on record for the month of July and is $45 million above the previous record set last July. Also at a record high was the 160 new residence permits issued by Midland and Odessa in July, which Ingham said was the highest monthly total for any month and beat the previous record by 22 percent. The year-to-date total of 806 marked the first time the number of permits surpassed the 800 barrier.
Realtors in the two cities sold 336 existing homes, a record for July and nearly 11 percent above July 2013 numbers. Year-to-date sales of 1,915 is just 99 homes below the record of 2,015 set in 2005.
Ingham said the total dollar volume of residential sales activity stands at more than $470 million so far this year, compared to $218 million in the same period of 2005. He said prices have increased astronomically in that time, with the July average of $247,138 up 6.6 percent from last July’s $231,814, which was nearly 15 percent higher than July 2012 levels. So far this year, the sales price is averaging $246,413, up 12.9 percent from $218,345 a year ago.
Midland and Odessa’s economy is seeing greater success attracting dollars from outside the region. Ingham said business travel to the region continues to drive travel and tourism sectors. Enplanements at Midland International Airport were up 13.4 percent, to 51,110 in July, from 45,052 last July and are up 6 percent so far this year, to 307,291 from 290,017 a year ago. He said hotel-motel tax receipts are up 10.5 percent based on second quarter occupancy compared to last year.
If crude prices decline for any length of time and reduce oilfield activity, Ingham said the region should expect to see a return to normal economic growth rates.
“As of July, that’s not the case,” he said.
MDC and Security Bank are paying this guy how much?
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