ODESSA - Odessa’s economy continued to grow through third quarter 2014, but that could come to a halt if oil prices remain in the $70 range for a few months, according to the most recent Odessa Economic Index by economist Karr Ingham.
The study gauges multiple factors measuring the overall local economy such as building permits, hotel and motel tax receipts and sales tax figures. Because the oil and gas industry drives the economy, the index also looks at indicators such as drilling permits and rig counts.
The latest Odessa economic index showed another consecutive month of growth — up to 223.2 in September 2014 from 222.1 in August 2014. The unemployment rate was about 3.1 percent for the Odessa metro area, placing it among the lowest in the nation.
The recent report also showed a continued trend for 2014 in slower construction of residential homes than 2013, despite intense demand.
“The housing situation is not getting any better,” said Scott Jones, director of economic development for the Odessa Chamber of Commerce, pointing to just 35 permits for single-family homes in October and nine townhomes. “We have hundreds of people coming in and just a handful of rooftops.”
Developers attribute the slowdown in residential construction to the frenzy of the past three years to increase infrastructure costs as building moves to less developed land.
Attracting more residential development has become a focus for Mayor David Turner and other parties of a recently formed task force.
The benchmark West Texas Intermediate crude price was $74.36, as of November 2014 more than a 28 percent decline from the highs reached this summer.
Local oil and gas producers, investors and analysts do not foresee a bust, and neither does Ingham, but it remains to be seen how much local oil and gas activity will scale back in the lower price environment and how that will play out in the local economy.