September 7, 2018
In what is now becoming routine news, the Odessa Economic Index posted another strong increase in June 2018, rising to 243.6, up from a revised 240.6 in May 2018. According to West Texas economist Karr Ingham, spending indicators, new housing construction and existing home sales (and prices) are responsible for the increase. “Employment growth rates softened a bit in the second quarter (2018), but remain strong, and unemployment has reached historic lows,” he added.
General spending by households and businesses “continues to reflect eye-popping growth rates through the first half of the year,” Ingham noted, with first-half sales tax receipts up 46% year over year. Housing construction in 2018 (414) and existing home sales activity (Q2 2018 home sales exceeded 400) also broke records.
If there is any crack in the armor, it is the rig count, which peaked in June 2018 and began to decline. Ingham pointed out that pipeline capacity continues to be an issue, as are price discounts. He doesn’t anticipate that takeaway capacity will depress the Odessa economy, however, and “help is on the way with projects to expand pipeline capacity dramatically in 2019.”
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