An old joke suggests tightwads toss nickels around like manhole covers.
Amarillo-based economist Karr Ingham is not suggesting Waco shoppers fall into that category, but his March report on local economic trends indicates retail spending has stalled, increasing only fractionally from March last year.
For the quarter, January through March, the news was even worse. Spending declined 1.8 percent compared with last year, reaching $912 million.
Still, Ingham called the performance an “anomaly,” noting that spending for the moving 12-month period through March is up 2.4 percent from the previous 12-month sample. His findings are based on sales taxes generated in Waco, Bellmead, Beverly Hills, Hewitt, Lacy Lakeview, Lorena, McGregor, Robinson, West and Woodway, he said in his monthly roundup.
Spending aside, the Greater Waco Economic Index performed well in March and during the first three months of the year. The raw GWEI score hit a record 130.5 last month, paced by home construction, home sales and job growth.
Ingham prepares the report under contract with the First National Bank of Central Texas and the Tribune-Herald, using data dating to 2000.
Rising gas prices can erode consumer buying power, though Ingham did not specifically address that factor in his report. Local governments do not receive tax rebates on gas sales. The price for a gallon of regular unleaded in Waco has increased 18 cents, on average, as refineries tweak production to perform annual maintenance and shift to warm-weather blends less likely to evaporate.
“As the U.S. further blocks Iranian oil exports, global supplies are expected to continue tightening and retail gas prices will likely keep going up,” AAA Texas-New Mexico spokesman Daniel Armbruster wrote in a report Thursday.
The homebuilding binge in Waco continues unabated, Ingham said.
The 70 permits issued in March to build single-family homes in Waco was the highest since the 73 issued in March 2008. That figure represents only permits to build in Waco city limits, not outside the city, Ingham said.
National homebuilder D.R. Horton continues to make waves locally. It has secured 71 permits this year, while regional heavyweights Stylecraft and John Houston Homes have received 49 and 16, respectively, according to the local office of the Associated General Contractors of America.
Home sales also continue to impress, according to Ingham’s report. The number of closed sales in March was up 17 percent, and first-quarter sales were up 18 percent.
Translating demand into sales price, Ingham found the average home fetched $195,244 in March, a modest 2 percent increase. But the first-quarter average of $199,893 was 12.5 percent higher than the first quarter last year.
Scott Bland, whose family has been a part of the local homebuilding scene four decades, said construction is scattered all over Greater Waco.
“I don’t see any let-up, to be honest with you,” Bland said. “There is a lot of demand for starter homes, those priced in the upper $180,000s to $300,000, and for a change we have a place to build them. That has helped a ton. Two years ago, we had no inventory at that price point at all.”
Bland said his company is building homes in a McGregor-area subdivision called The Parks at McGregor, where he has acquired 10 lots and already is going up with two residences. He and several other local builders are taking part in Creekside, a 750-home subdivision to take shape over six years just off Warren Road in Waco city limits and the Midway Independent School District.
Then there is the massive 1,500-home Park Meadows subdivision in far West Waco, a project of D.R. Horton and Stylecraft, among others.
“Again, demand is incredible,” Bland said. “I just fielded a call today from someone in California moving to Texas. The migration from the West Coast is showing no signs of slowing down. Our biggest problem, as we’ve talked about before, is the shortage of labor to get anything finished. Everybody’s busy. Plenty of jobs, but not enough people to fill them.”
The area’s tourism industry continues to show growth, Ingham reported.
Hotel-motel revenue hit almost $4.8 million in March, a nearly 12 percent month-over-month increase, while first quarter revenue showed an 11 percent jump.
Vehicle sales are not sputtering but hardly revving, according to the report. They totaled almost $53 million in March, a 6.7 percent increase from March last year, which was down 8 percent from March 2017. First quarter vehicle sales of almost $150 million reflected a 2.6 percent decline from last year.
The local economy created an estimated 1,400 jobs the past year, and the jobless rate continues to fall, hitting 3.4 percent in March, the lowest March rate “over the entire history of the GWEI,” Ingham wrote.
“There is little to suggest that the economy will not continue to perform generally well in 2019, with at least modest growth on balance in spending, employment and in the index itself,” Ingham concluded.