Waco’s economy continued to grow throughout the first quarter of the year, bolstered by increased consumer spending, more automobile purchases and stays in local hotels.
The Greater Waco Economic Index rose to 113.1 in March, up from 112.8 in February and a jump from 108.5 in March 2013, according to the most recent report released Wednesday by Amarillo-based economist Karr Ingham.
The Tribune-Herald and First National Bank of Central Texas sponsor the report.
Ingham cites higher overall spending as the driving force behind the growth. Sales tax receipts for March grew 4.5 percent compared to March 2013. Inflation- adjusting spending for the first quarter of 2014 also grew by 6.4 percent during the first three months of 2013.
Those gains coincide with increased spending on lodging in the Greater Waco area. March hotel/motel receipts climbed by 25 percent compared to last March, while first-quarter spending at local hotels jumped by 19 percent compared to last year’s opening three months.
“The correct assumption is that visitors to the city are otherwise contributing to the Waco economy in the form of shopping, medical care, entertainment and so on,” Ingham wrote in the report.
Automobile sales hit a record for the month of March, increasing by about 18 percent compared to the previous year.
Kris Collins, senior vice president of economic development for the Greater Waco Chamber of Commerce, said the growing economic conditions also can be attributed to improved wages and employment opportunities in the area.
Median wages grew by 9.9 percent between 2009 and 2012, and unemployment also has continued to drop post-recession, she said.
The unemployment rate dropped to 5.1 last month, down from 6.1 the previous March.
“It means that more people are coming into the workforce, more people are finding jobs, and they’re having a higher disposable income to spend in the economy,” Collins said.
But new construction has slowed compared to last year, with the dollar valuation of new building permits issued last month dropping 66.4 percent compared to March 2013.
Collins noted 2013 saw an influx of new construction projects, especially related to the ongoing construction of Baylor University’s McLane Stadium, which likely will not be duplicated this year.
Home prices drop
Existing home sales grew by 9.9 percent compared to last March. But the average home sale price dropped 2.1 percent from $147,912 in March 2013 to $144,732 last month.
Scott Bland, president of McGregor-based Jim Bland Construction, said it is possible that the price changes stem from having one less large-sized home completed and that home prices are flat.
Bland’s company builds custom homes, and he said reasonable drops in home prices are preferred because they help maintain the market of prospective home buyers.
“Our concern in our industry is that housing is going to become more unaffordable,” Bland said. “For me, the lower that bottom line is, the happier I am because the happier my clients are, and the more likely they are to say, ‘Pull the trigger, let’s build this,’ whereas if the cost is too high, they put it off or decide not to do it.
“It’s a bit of a myth that as a builder, I want the house to be as expensive as possible.”
Collins said the index shows that the Waco economy has recovered and grown from pre-recession levels, when it stood at 111.7 during August 2007.
“We’ve surpassed where we were in the height of our economy, so that we’ve continued that steady growth has been great for us,” Collins said.