Midland, Odessa continue to post strong growth

MIDLAND, ODESSA – The September 2014 Midland-Odessa Regional Economic Index was up 6.9 percent from September 2013, according to economist Karr Ingham.

Amidst stunning growth, however, a more compelling story of impending change exists. The average price of crude, which peaked at $107 a barrel in summer 2014, averaged $89.57 in September 2014, down 13.3 percent from $102.90 in September 2013.

While crude prices fell from $102 to less than $75 in 2012, they recovered in the second half of the year. “I don’t have the sense oil prices are going to bounce right back,” said Ingham. Petroleum activity serves as a leading indicator of the direction of the overall Midland-Odessa economy, and lower oil prices will affect the overall economy in the next three to six months.

The number of drilling permits issued by the Railroad Commission in September 2014 soared to a record 1,402, up 110.8 percent from 665 in September 2013. At the same time, the rig count averaged 464 rigs, up 21.8 percent from 381 in September 2013.

Inflation-adjusted retail spending in 3Q 2014 was 13.2 percent higher than in 3Q 2013 and was up 11.2 percent in the first two-thirds of 2014 compared to a year ago. Automotive spending in 3Q 2014 was 20.2 percent above 3Q 2013 and so far 2014 is 16.4 percent higher than 2013.

Construction activity exploded in 3Q 2014 with $525 million in building permit valuations, the highest 3Q total on record. That total is up by more than 25 percent compared to 3Q 2013, which in turn was up by 68 percent compared to 3Q 2012.

September 2014 building permit valuations totaled more than $235 million due to nearly $140 million in new school construction in Odessa.

There were 904 homes sold in Midland and Odessa during 3Q 2014, up 8.1 percent from 836 in 2013. So far in 2014, 2,483 homes have been sold, up 5.3 percent from 2,359 during the same period in 2013.

The average sales price was $252,687 in 3Q 2014, up 3.7 percent from $243,651 in the 3Q 2013. To date in 2014, the average home sales price is $248,600, up 10.2 percent from $225,583 in the first three quarters of 2013.