The sale and construction of homes in the Greater Waco area slipped in October and overall spending turned sluggish, causing the Greater Waco Economic Index to stumble in month-over-month performance for the first time in nearly two years, according a report released Wednesday.
Still, “the modest decline does not likely represent the end of a growth cycle in the local economy,” said Karr Ingham, an Amarillo-based economist who compiles his findings for the First National Bank of Central Texas and the Tribune-Herald. “Sustained periods of growth in the monthly economic index are often characterized by scattered monthly declines here and there, driven by data volatility if nothing else.”
The economic index — which considers such factors as employment, inflation-adjusted spending, building-permit values and auto sales — hit 112.7 in October.
That is down a tenth of a point from the adjusted total of 112.8 in September, but still a “solid” 5.3 percent better than the 107 in October last year, Ingham said.
Possibly troubling for local merchants are figures showing that inflation-adjusted spending in October rose a modest 1.4 percent compared to the same month in 2012.
With the arrival of the holiday shopping season this week, retailers hope shoppers become more generous.
For the year through October, spending had been progressing at a clip 4.3 percent ahead of last year, a more encouraging sign.
That figure is based on sales tax receipts for Waco and the cities of Bellmead, Beverly Hills, Hewitt, Lacy Lakeview, Lorena, McGregor, Robinson, West and Woodway.
Spending on new and used automobiles in October hardly revved its engine, improving only 1.5 percent from the same month last year.
“However, the October 2012 auto spending total was up nearly 30 percent compared to October of the prior year,” Ingham said. “For the year to date, real auto spending is up by a solid 6.6 percent compared to the first 10 months of a year ago, and remains well into record territory.”
Low interest rates and consumers acting on pent-up demand have fueled car and truck sales nationally.
Local trade could receive an additional boost with the planned opening in December of Richard Karr’s new Buick, Cadillac, GMC dealership on Waco’s “Motor Mile,” West Loop 340.
Karr, whose dealership now is located at Lake Air and Valley Mills drives, said other dealers told him they enjoyed a double-digit increase in sales upon relocating to Loop 340.
General spending figures could grow because of the arrival of the Cabela’s Outpost store at Central Texas Marketplace.
It opened Oct. 30 to crowds of thousands who braved a steady rain to enter the building. It sponsored a week of grand-opening specials, only a fraction of which would have been reflected in October spending.
The $15.5 million value of building permits issued in October was not especially high compared to most other monthly totals this year, “but it was some 53 percent higher than October of a year ago as construction activity remains strong on balance in 2013,” Ingham said.
So far, contractors have received permits for projects worth more than half a billion dollars, specifically $508 million.
That includes the $260 million football stadium Baylor University is erecting on Interstate 35 at Lake Brazos, which will open for play in fall 2014.
“Interestingly, were the May monthly building permit total normalized to remove the permit for the Baylor football stadium, construction activity in 2013 would still be 10 to 15 percent higher compared to 2012,” Ingham said.
Other major projects include the multimillion-dollar transformation of the former General Tire plant into the centerpiece of the Baylor Research and Innovation Collaborative, and construction of Brazos Electric Power Cooperative’s new $32 million headquarters.
For comparison, consider that in 2000, which serves as the base year of Ingham’s report, permit values totaled $140 million after 10 months.
Existing home sales in October posted the first year-over-year decline of 2013, with the number of closed sales down by more than 15 percent from October 2012.
“But remember, October of last year was up by over 40 percent from the previous October, reversing several years of decline,” Ingham said.
Year to date, housing sales have risen 7 percent compared to January-October 2012, reaching “the highest number of sales for that period since the market sales peak in 2008.”
The average home sales price of $144,837 so far this year is up 2.1 percent from the $141,894 for the first 10 months of last year.