Economic growth remains strong in Midland-Odessa

MIDLAND, ODESSA - Economic growth remained strong in Midland-Odessa, according to the May Midland-Odessa Regional Economic Index.

Amarillo Economist Karr Ingham said the May index is 10.8 percent above the May 2012 index. The rate of growth has narrowed slowly but steadily.

“In fact, this would be the desired outcome. Rates of growth would not and could not continue at peak levels. However, a sharp peak followed by a nosedive would not be the preferred outcome, of course,” Ingham said.

While the index remains on the rise, it does so at a moderate pace “as the general economy and the regional oil and gas economy continue to flatten a bit, though at very high levels,” he said.

Ingham’s May figures may appear flat compared to year-ago levels but stressed that year-ago levels were very high.

Growth in employment is a characteristic of local economic expansion, and Midland-Odessa unemployment remains among the state’s lowest.

Year-over-year employment growth has narrowed slightly but steadily so far this year, with estimated total employment up 5.3 percent over May 2012, which was up over 8 percent from May 2011.

Construction activity in Midland-Odessa remains on the rise with the valuation of all building permits issued up by 11.2 percent year-over-year and by 32.5 percent thus far in 2013 compared to the first five months of a year ago, which in turn was nearly double that of the previous year.

“Housing construction continues to expand as well, with new single-family residential building permits up by nearly 14 percent and 19 percent for the month and year-to-date, respectively. And again, these come on top of some high numbers from a year ago,” Ingham said.

The only negative in the index remained existing home sales, a trend Ingham attributed to tight inventory. May existing home sales fell 3.2 percent compared to last May but are up 2.4 percent so far this year compared to the previous year.

The May sales price averaged $222,837, up 1.8 percent from $219,000 last May. The year-to-date average of $213,071 is 3 percent higher than last year’s year-to-date average of $206,770.

Last year’s year-to-date average was more than 12 percent higher than the first five months of 2011.