Increases in spending in January led to a slight increase in the Greater Waco Economic Index as overall economic development activity in the area remained stable.
Inflation-adjusted spending for the Greater Waco region totaled $183.5 million in January, a 3.4 percent increase over January 2014 totals, according to a report released Wednesday by Amarillo-based economist Karr Ingham.
The GWEI rose to 117.4 in January, up from 117.2 in December 2014 but a 4.1 percent jump from 112.7 in January 2014.
The report is sponsored by the Tribune-Herald and First National Bank of Central Texas.
“What I’m looking for month in and month out is ongoing improvement in two categories for the most part — that general spending number and payroll employment,” Ingham said. “If we’ve got growth in both of those things, then almost by definition you have an improving economy.”
The report lists January unemployment rate at 4.1, down from 5.3 in January 2014. But that figure is expected to change when official payroll and unemployment statistics are released by the Texas Workforce Commission in March.
Ingham estimated the January 2015 unemployment figure based on payroll data and seasonal employment trends for the Waco area.
The March data likely also will include a revision of employment data for 2013 and 2014 as part of the agency’s annual review process, which would lead to a recalculation of the Greater Waco Economic Index for the past two years.
“What that does is raise the bar, it resets the base from which you go through your (unemployment) estimation process for the rest of the year,” Ingham said. “It looks like the wave of a wand and all of a sudden you’ve got 2,000 more jobs than you thought you had, or conversely, you’ve got 2,000 jobs less than you thought you had. Whatever it is, we’ve got to go back and plug all their new monthly numbers in for last year and the year before.”
Automobile sales increased slightly by 1.5 percent over January 2014, totaling $40.8 million this year.
But the total value of building permits dropped 42 percent year over year to $15.6 million in January, down from $27.1 million in January 2014.
Whitney Richter, business development and marketing manager for the Greater Waco Chamber of Commerce, said that doesn’t mean the pace of new development is slowing in Waco. She noted that projects like the construction of a Home2 Suites by Hilton hotel at Interstate 35 and Valley Mills Drive, a new Heitmiller Steakhouse being built in Legends Crossing and an expansion at the Allergan Inc. vision pharmaceuticals plant are underway.
Richter said the difference may be in lower valuations for new projects this year, signifying a shift to smaller commercial developments.
“The number on this doesn’t necessarily equate to what we’re seeing in the marketplace,” Richter said in a meeting unveiling the index report with business leaders. “In 2014, we saw some really large projects, and especially in 2013 with (McLane) Stadium, so I don’t think this necessarily has an outlook on what this year is going to be, it’s just the valuation of the projects that are coming through versus the previous years.”
Brian Mitchell, vice president of Mitchell Construction Co., said at the meeting that he is optimistic the improving economic conditions will encourage existing manufacturing companies to commit to expansion projects they may have delayed while gauging whether increased demand for their products will be sustained.
“When they get big orders and have a high volume of demand, they don’t necessarily jump into doing some sort of construction project to account for meeting those orders until they are comfortable with the fact that they’re going to continue on,” Mitchell said.
“We’re kind of to that point now . . . so that’s promising for us and it’s promising for our economy as a whole, because hopefully the trend is going to continue and people are going to keep producing, keep purchasing, keep building.”
Greater Waco Chamber President and CEO Matt Meadors said the pipeline of projects and prospective companies eyeing Waco continues to grow as the city continues to become an attractive option for new development.
“Interest in our marketplace remains very, very strong, and we’re starting to get additional inquiries as it relates to trying to better understand what’s happening in terms of retail investment and also in apartment and housing,” Meadors said.