Economic Pulse

City economy still going up

By Greg Rohloff
Business Correspondent

Being a producer of the basic commodities — such as oil and gas or farm crops — Amarillo would be seeing the proverbial best of times, according to the monthly Amarillo Economic Pulse.

The index, compiled by Amarillo National Bank, reached 217.27 for March, up from both the preceding month of 215.69 and a year ago at 185.37. Such increases indicate strength for at least the next quarter, according to the Pulse.

The only trouble spot for the local economy is in fat cattle, which during the month were losing between $110 and $130 a head. High feed costs, the flip side of the strong prices for grain farmers, are driving those losses, said Patrick Ware, an assistant vice president at Amarillo National Bank

It's causing him to take a wait-and-see position if the losses for cattle producers drive down other index components.

As it stands now, though, the strong commodity prices are boosting employment, retail sales and commercial construction. Residential starts are down 13.9 percent from a year ago as the number of houses for sale stands at 10 percent greater than a year ago even though mortgage rates are essentially the same.

Amarillo has gained 1,500 jobs from a year ago, more than doubling Lubbock's increase of 700 jobs. Previously, Lubbock's and Midland-Odessa's job gains were much greater than Amarillo's.

Ware said he was not expecting job growth to keep that pace.

"But we're not expecting to see net job losses."

The significance is the weak nationwide job report during the month, causing an uptick in the talk of recession or an outright declaration that the national economy is tanking for now.

Retail sales were up 10.3 percent from a year ago, which the Pulse noted was the third highest percentage gain in Texas. Used vehicle sales, up 21 percent, drove the increase in overall vehicle sales, up 8.7 percent from a year ago, with new car sales failing to reach last year's figures.

Although housing starts are down, building permits for the month were up 50 percent from a year ago and 42 percent for the year-to-date.

Among commodities, oil is up 77 percent from a year ago, natural gas up 32 percent, wheat up 127 percent and corn up 28 percent.

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Posted: April 10, 2008