Shoppers got into the spending spirit in November, shelling out $231 million on retail items and $37 million on new and used vehicles as they prepared for the holidays, more than they spent in each category during the same month last year, Amarillo-based economist Karr Ingham reported Tuesday.
Ingham said lofty numbers across the board in November marked the 46th month of growth in the Greater Waco Economic Index since it bottomed out at 101.5 in January 2012. The index reached 121.6 in November, up half a point from 121.1 in October, according to the monthly report sponsored by First National Bank of Central Texas and the Tribune-Herald.
Sparked by Black Friday spending the day after Thanksgiving and sales that lasted much of late November, spending last month was 4.5 percent higher than in November 2014, which was 10.5 percent higher than in 2013. For the first 11 months of the year, spending locally has exceeded $2.2 billion, also a 4.5 percent jump.
Those figures reflect sales tax receipts in Waco, Bellmead, Beverly Hills, Hewitt, Lacy Lakeview, Lorena, McGregor, Robinson, West and Woodway.
As for car and truck sales in November, they left October in the dust with a 19.4 percent increase.
“I think low gas prices are driving it,” said Amy Hunter, owner of Jeff Hunter Toyota/Scion, commenting on robust vehicle trade last month and throughout 2015. “We’ve certainly seen an increase in sales here, primarily involving new vehicles, and I think cheap gas and low interest rates are contributing to the trend.”
She said vehicle shoppers have more to spend because they are saving money at the pump and they see declines in the cost of operating a new vehicle.
Local trends reflect nationwide trends, Hunter said.
“I haven’t seen any bad numbers coming from any manufacturers,” she said.
The statewide average price for a gallon of regular unleaded gasoline dropped 1 cent the past week, to $1.79, AAA of Texas and New Mexico reported Tuesday. That is 37 cents less than motorists were paying at this time last year, said Doug Shupe, a spokesman for the auto club.
Monday, the national average for gasoline dipped fractions of a penny below $2 for the first time since the Great Recession that began in 2008.
“Barring any unexpected disruptions in supply, and if the price of crude oil remains low, retail averages could continue to hover around levels unseen since March 2009,” Shupe said. “More than 13,000 stations nationwide are selling gasoline for less than $1.75 per gallon.”
The surge in spending, Ingham said, could reflect growing employment levels in Greater Waco and McLennan County.
Ingham said the Waco Metropolitan Statistical Area, which includes McLennan and Falls counties, added about 1,500 jobs during the past 12 months.
“Thus far in 2015, employment growth has averaged 1.5 percent, and in fact the Waco economy has been steadily adding jobs since 2013,” Ingham said.
The jobless rate in November stood at 4.5 percent, down from 4.1 percent in November of last year.
Building activity pulled out of its slump in November, with the value of permits reaching the highest value of any month this year.
“The $70.6 million in building permits issued, more than double the November 2014 total, includes $36.3 million for a new multifamily housing complex and nearly $23 million in permits for commercial alterations or additions,” Ingham said.
Permit values remain in negative territory for the year at $381 million compared to $442 million in 2014, the year Baylor University completed construction of its new $266 million McLane Stadium, he said.
On the housing front, permits were issued for 40 new single-family homes in November, which is a record for the month. For the first 11 months of the year, permits have been issued to build 349 homes, which is one more than the 348 for which permits were issued through November of last year.
Steve Sorrells, a custom-home builder, said several factors prompted the run on building permits in November.
“No. 1, we have no inventory left, and we’re seeing really fast turnarounds on the resale market,” Sorrells said, commenting on demand for new homes. “I’m also seeing a sense of urgency among builders, who wonder if we’re at the end of super-cheap money. They wanted to get going before interest rates ratchet up a little bit.”
Sorrells said he has wrapped up street construction and is preselling lots for his Cloister at Cameron Park addition on Edwards Drive, which will include 11 homesites. He said this subdivision is designed to have a low environmental impact by including rain harvesting and encouraging use of solar power.
Sorrells also is about to proceed with the next phase of his Cameron Heights subdivision near downtown, this one The Cottages at Cameron Heights. He is placing 19 homes between Fourth and Fifth streets on Bosque Boulevard averaging 1,500 square feet in size and priced between $160,000 and $200,000.
Woody Butler, president of the Heart of Texas Builders Association, theorized that more national builders are entering the Waco market who have done their homework “and now are taking out building permits to hit the ground running.”
He said local builders are experiencing a shortage of lots “and there is no such thing as a bargain on lots right now.”
The sale of existing homes “remains solidly in record territory,” though sales in November were almost dead even with sales in November last year, Ingham said.
The average price for homes sold in November was $169,877, 16.7 percent more than the $145,513 in November of last year.