Higher employment and increased consumer spending created modest improvements in the local economy, but the slowed pace of new construction projects could stymie future growth.
The Greater Waco Economic Index grew to 113.3 for April, a slight increase from 113.1 in March and the sixth consecutive month of growth, according to a report from Amarillo-based economist Karr Ingham. The April figure is a 3.7 percent jump from 109.3 in April 2013.
The index is sponsored each month by the Tribune-Herald and First National Bank of Central Texas.
The Greater Waco area has added 900 new jobs since last April, a gain of just 0.8 percent. But the unemployment rate for April 2014 fell to 4.4 percent, a 23 percent drop over April 2013.
Inflation-adjusted consumer spending for the region reached $168.4 million in April, a 2.9 percent increase over sales tax receipts in April 2013. In addition, April automobile sales rose by 10.8 percent compared to the previous April.
“Our sales taxes have exceeded our revenue projections for the last three years, every month. It’s been phenomenal,” Mayor Malcolm Duncan Jr. said of Waco’s spending receipts, noting that property taxes will continue to be the city’s primary revenue source. “We’re very sensitive to the retail environment. But the sales tax is so volatile, you can’t rely on it.”
David Kersten, general manager of Allen Samuels Chevrolet and Mercedes-Benz of Waco, said the company has continued to see steady gains in sales, with monthly increases no smaller than 3.6 percent.
“The car business right now, we’re actually going to a peak,” Kersten said. “I don’t think we’re there yet . . . we’re riding that wave, so to speak, and it’s going to come down at some point.”
But new construction has dropped significantly compared to last year, a trend Ingham noted could eventually force the index to flatten or drop. Total building permit valuations for April were $32.4 million, a 42.2 percent drop from last April.
But Ingham noted in the report that April 2013 permit valuations were up by 518 percent over the same month the previous year, part of a three-month swell of major construction projects that included the H-E-B Plus! store at South Valley Mills Drive, work on Baylor University projects like McLane Stadium and the Baylor Research and Innovation Collaborative, and new apartment and retail shopping centers throughout the area.
“You can look back on 2013 and see that we had some massive growth, so essentially it’s hard to maintain that same growth pattern,” said Whitney Richter, marketing and research manager for the Greater Waco Chamber of Commerce. “But when you look at projects coming in the pipeline, we’re definitely a growing community.”
For example, Gander Mountain reportedly plans to build a 51,896-square-foot store at Bagby Avenue and South Valley Mills Drive, while Wal-Mart is building a new location at Interstate 35 near Sun Valley Boulevard in Hewitt’s Commerce Park.
New home construction permits also fell from 41 in April 2013 to 22 last month, a 46.3 percent decrease, according to Ingham’s report. The April 2013 numbers represented a 70 percent increase in new home builds compared to the previous April.
Richter said those figures only reflect Waco home permits, while areas that are seeing greater residential development, like McGregor, Robinson, Woodway and Hewitt, are not included.
April did register 219 existing home sales, the second-highest recorded total for April since the index’s creation and a 15 percent increase compared to the same month last year. In addition, the average home price rose to $138,831, a 15 percent jump over April 2013.