Move Over Midland, San Angelo's Economy is Still Booming

Devon Energy moved into a brand new facility at 5430 Old Link Road, just off Old Christoval Road, on the southeast side of San Angelo. The 85 employees there are enjoying the new 77,000-square-foot facility where Devon’s oil field operations for the region are now consolidated, according to Devon’s spokesman in Oklahoma City.

Devon’s upgrade doesn’t indicate that there is much of an economic slump occurring in the region. The San Angelo Chamber of Commerce is watching key indicators closely, and so far confirm a downturn isn’t materializing according to Chamber President Phil Neighbors.

Two of the economic indicators that Neighbors and staff watch closely are the sales tax receipts and hotel occupancy rates by comparing the numbers each month with the rate-of-growth during the same month last year. “I’m pretty sure we’ll end the year up overall, I’m less certain that we’ll beat last year’s numbers month to month,” Neighbors explained to the San Angelo Rotary Club Friday.

Not all of the news is wonderful. In the Concho Valley, which includes surrounding counties, the Chamber has tracked approximately 400 layoffs, generally within the energy sector. “But that’s pretty insignificant when you take into account that there are still more people employed [around here] today than 12 months ago,” Neighbors said.

There are more hotel and motel rooms this year than last, and that has placed downward pressure on the motel room rates and occupancy. Occupancy rates have dipped 21.4 percent for January 2015 compared to the same month last year. “But with more rooms available at a lower price, it has allowed us to sell more conventions and conferences,” Neighbors said. A real test of how the occupancy rate is fairing for 2015 will be when the State Comptroller releases February’s report on tax receipts for motels, marking the timeframe of the San Angelo Stock Show and Rodeo.

January marked 54 straight months of increases to the sales tax receipts over the same month the previous year, Neighbors said. “That’s unprecedented for San Angelo,” he said. In comparison, Midland experienced the first month in over five years of realizing a negative growth rate of its sales tax receipts. “Midland is more dependent upon energy, and have had higher highs in previous years,” Neighbors said.

The bottom line, Neighbors said, is that sales tax revenues continue to climb in San Angelo and San Angelo’s sales tax growth, at 10.2 percent in January, is the highest of the similar-sized west Texas cities and second highest in the state to Fort Worth’s.

Neighbors believes San Angelo’s economic diversity is allowing it to weather the energy slump.

“The diversity I speak of in the economy includes not only Goodfellow AFB (the largest), but also Angelo State University, Howard College, City, County, & ISD in the public sector, and then large components of employment in the private sectors of retail and wholesale trade (anecdotally, 1/3 of our retail dollars come from outside of the city), manufacturing (approximately 9-10% of our workforce, right below the state average), services, medical, and arts and tourism related. That diversity is what insulates us from the huge upswings and downswings we see in less diverse economies,” Neighbors explained Friday afternoon.

The Concho Valley Workforce Board indicates that our local energy employment is 5-6 percent of San Angelo’s workforce, while the same board in the Permian Basin estimates that their employment is 25 percent directly energy-related.