Odessa’s economy is growing at a white-hot pace — evident in everything from surging employment and hotel stays to general spending and home and auto sales.
Amarillo economist Karr Ingham, who’s studied the local economy since 1996, says “the Odessa general economy is simply on fire” following a rapid recovery since hitting its bottom during the bust of 2017. The economist’s latest report, using data for April, shows record-setting figures across a range of indicators to measure the state of the local economy.
“If you sat back and tried to predict the numbers we are seeing now five or six months ago, it would be difficult to do,” Ingham said. “They are just stratospheric. This period of growth and expansion is really unrivaled by anything we’ve seen in the past.”
Most of that’s driven by the oil industry. And even though measures of the oilfield activity such as the rig count and drilling permits issued are not at record highs, employment in the industry is.
Nearly 40,000 people in the Odessa and Midland area worked in the oil and gas industry in April, Ingham wrote in a new report using the latest labor data from the state. That was about 34 percent more workers on oil and gas company payrolls than in April 2017.
And the true figure is likely greater, because self-employed workers aren’t counted.
Today, Odessa’s unemployment rate of 2.8 percent in April, which is the most recent month the data is available, nears a record low. And with all that growth brings tightening markets for houses and hotels, among other strain on local infrastructure.
Some of that is also evident in Ingham’s latest report, which is commissioned by the city through the Odessa Development Corporation. Ingham’s measure of the local economy, the Odessa Economic Index, hit an all time high in the latest report, breaking a record set in January 2015 as falling oil prices were about to upset the local economy.
Now, while still short of the peak during the last boom, the Permian Basin’s 476 rigs account for more than half the rigs drilling for oil in the country. And production in the region has continued to grow to more than 3.2 million barrels per day, to the point that pipeline constraints put downward pressure on prices.
The latest payroll data shows oil and gas jobs comprise “an ever-larger share” of Odessa’s workers.
In all, more than 71,000 people in Odessa show up on payroll employment figures. Since the low-point in mid-2016, companies added about 7,000 Odessa workers to the payrolls. Of those, about 4,200 of those jobs were classified as in oil in gas.
The job growth has created a housing crunch.
The Odessa Board of Realtors continues to report near-record low housing inventory — a measure of market that estimates how long it would take all the listed homes to sell. In April, there were 1.6 months of inventory, down from 4.4 months during the same month of 2017. The median price, meanwhile, was up more than 22 percent over the same period.
But sales of existing homes still climbed by more than 60 percent in April compared to the same month of last year.
“It’s as hot as we can handle, and there’s many challenges but tons of opportunity,” said Wes Burnett, director of economic development at the Odessa Chamber of Commerce.
Retailers and home builders are responding.
Building permit valuations in April were 60 percent higher than year-ago levels. New housing construction permits were up by 175 percent.
But workers still have trouble finding a place to live.
“I’m not sure we are even in the middle of this yet,” Burnett said.