Recent changes in economic indicators suggest that the Eleventh District economy is continuing to grow, although the present expansion may have begun to slow. Texas industrial production and District employment advanced strongly in September, and District agricultural conditions are good to excellent. But new construction contracts and demands for credit dropped sharply, and department store sales have leveled off. In addition, an informal survey in early November of Texas buyers of crude oil, petroleum industry associations, and Texas railroad commission staff revealed broad concern over the adequacy of present and future availability of crude oil and refined petroleum products to meet the state's energy requirements.

Several respondents felt that present stocks of crude and refined products are not as adequate as statistics indicate because figures include pipeline fill. As a result, fuel stocks may only be sufficient this winter to see the state through its first severe cold spell. Moreover, the crude oil buyers indicated that they are already having difficulty finding the supplies to meet their company needs and the full impact of restrictions already placed on petroleum exports from the Middle East has not been felt.

The outlook for oil availability is further dimmed since production in Texas oil fields is currently falling at a rate around 3 percent per annum, while demand has been rising about 6 percent or more a year. Some of the Texas railroad commission's staff indicated a belief that the commission would be reluctant to waive conservation restrictions to allow greater production and that it may not have the legal authority to do so in any event.

The survey respondents were also concerned that new mandatory allocation programs based on historical use patterns would make fuel oils more scarce in the Gulf states. In Texas, for example, many utilities and industrial concerns have recently switched from expensive and hard-to-get natural gas to fuel oil, and consequently, they may not qualify for allocations on the basis of past use patterns. Many farmers could be denied diesel fuel because last year's weather conditions prevented planting and reduced their demand for fuel. Similarly, some drilling and transportation firms face problems obtaining diesel fuel because they have recently switched from another type of fuel or because the mobility of their operations has not allowed them to establish a use pattern in a given region.

Seasonally adjusted total employment in the five District states rose 0.6 percent in September. Gains were made in all sectors except nondurable manufacturing, but the increase largely reflects a sharp rise in construction and governmental employment. The 400 percent unemployment rate for September is 0.4 percentage points lower than the figure a year earlier, but it has remained in a narrow band around 4.0 percent since November 1972.

The seasonally adjusted Texas industrial production index advanced 1.0 percent in September to a level 7.4 percent higher than a year ago. All major components contributed to the increase, but the advance in utilities was particularly sharp.

Department store sales in the District were 7.8 percent higher in the four weeks ended October 27 than in the comparable period of 1972. But at the same time, the sales pace has subsided from the peak reached last August when sales were 5.2 percent above last month.

Construction activity in the five southwestern states, as measured by the value of new contracts, fell 25 percent in September. Contracts declined in all categories, but most of the fall resulted from reductions in awards for residential and nonbuilding construction. While the value of nonbuilding contracts has vacillated each month this year, residential contracts have generally declined since June. Agricultural conditions in the five District states remain good to excellent as the harvest of a bumper crop gathers momentum. If current conditions prevail, crop production for 1973 is anticipated to reach a level 22 percent higher than in 1972, and livestock production is expected to be slightly greater than last year. As production increased, average farm prices have also risen. Through the first eight months of this year, cash receipts from farm marketing rose to $6.0 billion, 35 percent greater than in the same period of 1972.