West Texas economist Karr Ingham did not label Greater Waco residents tightwads, but did say retail spending remains anemic.
Ingham released June results this week for his Greater Waco Economic Index, a monthly snapshot gauging home sales, spending, the jobless rate, hotel stays and automobile sales.
For the first time in four months, the GWEI raw score declined, slipping to 131.1 from 131.3 in May.
“Even at that, the June index still represents the second-highest monthly Greater Waco Economic Index value on record,” behind only the record set the previous month, Ingham said.
He uses data dating to 2000 to prepare the report sponsored by the First National Bank of Central Texas and the Tribune-Herald.
Ingham said the chronic sluggishness in spending is troublesome.
“While the numbers are not catastrophic, clearly stronger spending growth would be desired even compared to solid numbers from a year ago,” Ingham said.
Ingham analyzes sales tax revenues in Waco, Bellmead, Beverly Hills, Hewitt, Lacy Lakeview, Lorena, McGregor, Robinson, West and Woodway.
“Record low unemployment rates and record high existing home sales continue to provide the primary upside support to the GWEI, but in June that was insufficient to counteract the negatives in other areas of the local economy,” he wrote in his report summary.
June retail sales totaling $284 million were fractionally higher than last year, but the $898 million in sales from April through June were fractionally less than the same quarter last year. The $1.83 billion in sales so far in 2019 are a full percentage point behind last year’s numbers through June.
About 900 people found jobs produced by the Waco economy the past year, but June’s rate of job growth fell below 1%, to 0.7%, “the lowest employment growth rate since May 2018,” Ingham said. Likewise possibly discouraging, Ingham said, is that year-over-year job additions hit 2,000 in both January and February, according to the GWEI.
Spending on new and used vehicles was down by about 5% in June compared to June last year. For the year through June, the public has spent $308 million on cars and trucks, a 3% slide from last year.
“Still that qualifies as the second-best January-June auto sales total,” Ingham said.
Hotel and motel revenue in June was practically even with the same month last year, though revenues in June last year eclipsed June 2017 by 18%. For the year, revenues are running 6% ahead.
Even the housing market stumbled in June, at least the portion relating to new home construction. Waco issued 31 permits to build single family homes, a 34% decline from the 47 in June last year. For the year, builders have secured 311 permits, a 1.9% drop.
Existing home sales again proved one of the few bright spots. A total of 343 changed hands in June, Ingham reported, citing the Waco Multiple Listing Service. That represents an almost 12% year-over-year increase.
Year to date, 1,531 homes have sold, a 10.2% jump.
During the second quarter, sales totaled 925, a 10.3% jump.
Waco is outpacing the state in that category, from a percentage standpoint. The Texas Quarterly Housing Report released this week by Texas Realtors said 101,896 existing homes were sold statewide during the second quarter, which reflects a 1% increase from the same quarter last year.
“While the Texas housing market remained strong in Q2, our markets began slowing down in terms of transaction volume coupled with tight housing inventory,” Jim Gaines, chief economist with the Real Estate Center at Texas A&M University, is quoted as saying in the report.
A separation is forming between large cities and medium-and-smaller cities as job and population growth is “concentrated in the major markets,” Gaines said.
Locally, the average home sales price slipped to $222,371 in June from $230,046 in June last year, but the average is up 8.6% year to date.
“Not surprisingly, and as has been the case for some time now, the total inflation-adjusted dollar volume of home sales activity continues to plow yet deeper into record territory, posting sharp year-over-year gains,” Ingham reported. “That number is up by 17% through June compared to the first six months of a year ago.
“The Waco housing market is simply a pillar of strength underlying the greater economy. General spending and employment are without question the primary cyclical indicators of the greatest import; however, a strong housing market with increasing residential real estate values is a strong foundation underneath this economy.”