AMARILLO, Texas (KAMR/KCIT) — Amarillo National Bank (ANB) recently released detailed information on its 2023 economic forecast along with an economic recap of 2022.
2022 Economic Strength
There was an 11% economic growth in Amarillo in the first half of the year and a 4% growth in the last portion of the year, according to the ANB report. Retail sales and energy prices showed positive growth in the summer but then dropped around 10-30% in the winter.
In addition, construction and airlines stayed at a positive level while higher prices assisted the cattle and dairy industry. “Feedyards are moderately profitable, and dairy should have another good year overcoming high input costs,” the report detailed.
Tourism continued to assist in Amarillo’s economic growth as airline boardings surged to an increase of 22.7%.
2022 Economic Weakness
ANB noted that national inflation and the supply chain shortage had a major impact on the economic status in Amarillo.
Higher interest rates also had an impact on the economy, specifically with housing and auto sales in the area.
The drought swept through the High Plains and impacted agri-businesses throughout the first half of the year while higher irrigation costs hurt income. “Cow and calf operators had to thin herds due to the drought and missed much of the upside,” the report stated.
Supply chain issues are expected to settle, which officials expect will assist local businesses while an increase in prices, labor costs and inflation will negatively impact businesses by the end of 2023, ANB officials said.
“I think the major factors in the economic slowdown are obviously going to be interest rates being higher, wages being up, money supply, being a little tighter, and worker shortages are still going to be out there, said William Ware, President of Amarillo National Bank.” “So that’s going to make it tough for businesses to operate throughout the year.”
As it pertains to employment, ANB detailed that the opening of the Amazon facility will help with economic growth and construction staffing is expected to stay at a steady pace in 2023 along with Pantex, Bell, Tyson, Government, and energy-related employment. According to data provided by ANB, the average employment in 2023 is estimated to reach 2.8%.
“Slower job growth in Amarillo will be partially offset by higher wages in 2023,” the release stated.
Grocery sales were up 13% due to inflation issues in 2022 and Amarillo is expected to see a 7% Consumer Price Index increase in 2023, according to ANB.
The agri-business may see an improvement in the yearly average cost of certain feeds including wheat at $8.00 from $9.55 in 2022 and cotton which went from $93.51 to an expected $90 this year.
Oil prices are also expected to rise in 2023 while natural gas will shift between $4 and $7. “All this combines to support our economy, but higher prices will spur inflation,” the report said.
High interest rates will have a positive impact for those focused on saving money.
“One bright spot with higher interest rates, as you do get some more money on your deposits, said Ware.” “So, the savers are rewarded for saving their money.”
Travel will continue to be a strength in the Amarillo economy in 2023 with an expected rise of 8% as more airline nonstops will boost boarding.
ANB concluded, “Our index turned negative in the fall predicting a weaker economy six months into the new year.”