March 2026

Most information reflected in this

report is through October 2025

By Karr Ingham

InghamEcon, LLC

The Odessa Economic Index registered its fourth straight monthly decline in October retreating to 251.0 for the month down from 251.7 in September. The index also fell below its year-ago level for the first time since September 2021, down by 0.1% compared to October 2024 OEI of 251.3.

The housing and construction indicators continue to weigh on the index with negatives across the board for building permit valuations, new single-family residence construction permits, existing home sales, and the total sales value of residential real estate transactions.

General spending and auto spending are exhibiting lackluster growth – though it is still growth – along with hotel/motel activity, though the rate of employment growth ticked upward a bit according to the current October estimates. The Texas Workforce Commission did not release unemployment data for the month of November, but the unemployment rate has been higher compared to its year-ago level for most of the year, including the months before and after October so the October unemployment rate would likely have been higher as well.

Lower – or slowing – levels of economic activity and the resulting decline in the Odessa Economic Index track with lower oil prices and falling rig counts in 2025, though the mainstay indicators of general spending and employment continue to fare reasonably well.

The Texas Permian Basin Regional
Oil and Gas Economy

The rig count has been in decline since January 2023, and that trend continued in October with the Texas Permian rig count (RRC districts 7C, 8, and 8A) falling to 158 for the month down from 167 in September.

Crude oil price decline is what sets 2025 apart from 2023 and 2024, however, and that coupled with activity declines is slowing the Odessa general economy this year. Crude oil prices continued to decline in October as well, falling to $55.96 (WTI posted), down from $59.45 in September, and down 17.5% compared to October 2024. In real (inflation-adjusted) terms the October crude oil price is down by close to 20% year-over-year.

The number of drilling permits issued in the Texas Permian was actually higher in October, up by 21% compared to the October 2024 total. That seems to be an anomaly, however, and the year-to-date total remains down by over 16% compared to year-ago levels.

Crude oil production in RRC districts 7C, 8, and 8A has shown modest decline in 2025. Total Permian Basin crude oil production is higher in October compared to year-ago levels, but those gains are coming from New Mexico, while Texas has flattened and begun to decline.

Natural gas production continues to increase and set new records, though the rate of growth has slowed in 2025 compared to 2024, and this in the face of consistently weak natural gas prices in the region, including a negative price for the Waha hub in October.

Direct upstream (exploration and production) oil and gas employment in Midland-Odessa reached a record level at nearly 45,900, at least according to the current estimates. We should be wary of those numbers, however, as there is a strong possibility they may be revised downward as a part of the annual employment data revision by the Texas Workforce Commission.

The Odessa General Economy

And as we told you in the previous report, that is also the case with Odessa total employment. At least for now, however, Odessa employment set a record in October as well, with the seasonally adjusted estimate of 84,500 outpacing the previous record of 84,400 established in April 2019. The non-seasonally adjusted October estimate of 85,100, indicated on the table of economic indicators for October, is a record for the month of October as well, and reflects a year-over-year growth rate of 2.0% (1,700 jobs added over the last 12 months). Again, however, these numbers may not survive the upcoming annual revision for Texas, and Texas metro areas.

The Texas Workforce Commission did not release Local Area Unemployment Statistics (LAUS) date for the month of October, related to the government shutdown. So, we simply estimated that number according to recent trends, and we will plug in revised data when it is released. That estimate of 4.1% for October is higher compared to the 2024 unemployment rate of 3.6%

General real (inflation-adjusted) spending per the October sales tax rebate to the city of Odessa was up by a modest 1.5% compared to the October 2024 total, which in turn was down by a sharp 10.0% compared to October of the prior year. For the year-to-date general real spending is up by 3.9% compared to the total through October of a year ago.

Auto sales activity was up only slightly in October with inflation-adjusted spending on new and used motor vehicles up by a scant 0.6% compared to October 2024. Year-to-date auto spending is up by a solid 4.4% compared to the first ten months of 2024.

Building continues to trend lower in 2025 with the inflation-adjusted valuation of new commercial and residential construction down by over 17% in October, and the year-to-date total off by nearly 29% compared to the total through October 2024. A very respectable 102 permits were issued for new single-family residence construction in October, but that was still down compared to the 107 permits issued in October of a year ago. For the year-to-date, however, new housing construction by this measure is down by a sharp 24% compared to 2024 levels.

Existing home sales remain lower as well with the number of closed sales in October down by nearly 10% year-over-year. That pulled the year-to-date sales total to over 6% lower through October, compared to the number of sales through October 2024. The average price of those sales spiked upward in October, however, up by 7.5% compared to the October 2024 monthly average, which in turn was up by 12.6% compared to October of the prior year.

The lower number of sales (and the adjustment of inflation), even at the higher average price, resulted in lower overall sales activity, however. The inflation-adjusted total dollar volume of residential real estate transactions was down by 6.5% year-over-year, with the year-to-date real total down by 8.4%.

The spending indicators have held up reasonably well thus far, which is to say they remain in positive year-over-year territory and there has been little in the way of recent monthly declines as well. The same is true of employment, though, again, these numbers are subject to revision in the coming weeks, and those trends could change with the release of those numbers.

For more information on how the Odessa Development Corporation can help your local business expand, contact our office at (432) 333-7881.