Lubbock Economic Analysis

Lubbock's economy showed improvement in April, with notable gains in retail sales and an increase in new vehicle purchases-likely influenced by ongoing tariff uncertainty encouraging buyers to act sooner.

Overall construction activity declined by 13.38% compared to March, a smaller drop than the 30% decline recorded the previous month. However, true residential construction rose 21.46% from March levels. Excluding a permitted student housing project, residential activity surged 58% for the month. On the other hand, commercial construction has remained stagnant, with no major projects initiated in the past year. Tourism also saw a modest uptick. Challenges remain in the national economy with tariffs, the passage of the tax bill, and inflation concerns due to tariffs possibly being levied on goods. All of these factors could have a ripple effect on our local economy.

Retail sales in April 2025 rose by 6.29% compared to April 2024. Year-to-date sales reached $45.28 million, up $1.17 million - or 2.65% - from the same period last year. New vehicle sales totaled 875 units for the month, a 6.71% increase over April 2024. In contrast, used vehicle sales declined by 6.71%, with 1,834 units sold.

In April 2025, Lubbock saw a notable uptick in tourism activity, with hotel/motel tax collections reaching $878,154-a 2.59% increase over April 2024-signaling strong demand for local accommodations. In contrast, airline boardings at Lubbock Preston Smith International Airport totaled 44,927, reflecting a 3.42% decline compared to the same month last year.

Over the past year, employment in Lubbock has experienced notable growth, though data varies by source. According to the Employer Survey, employment rose by 8.59%, adding approximately 13,900 jobs. In contrast, the Household Survey shows a 117% decline, equating to a loss of about 2,164 jobs. Since April 2024, Lubbock's labor force has grown by 1.86%, and wages have increased modestly by 1.75%. As of April 2025, the unemployment rate stands at 3.00%, up 7.14% from a year earlier.

In April 2025, the total value of residential and commercial building permits reached $137 million, marking a decline of $21.18 million-or 13.39% -compared to April 2024. Year-to-date, overall building activity is down 15.65% from the same period last year, representing a decrease of $68.93 million.

Residential building activity in April 2025 reached $117.6 million, representing an increase of 87.87% compared to April 2024. Included in the April 2025 figures was a student housing project valued at $66.7 million, which significantly boosted residential building permits. When adjusted to exclude the $66.7 million student housing project, residential building permits increased by $10.0 million, or 24.73% year-over-year- a modest rise, though still below historical trends.

Year-to-date, residential construction has grown by $105.4 million, or 58%, including the $66.7 million student housing project. Adjusted for this project, residential construction is up $38.7 million, or 21.46% year-to-date, indicating an upward trend for the year. In contrast, commercial building activity decreased by $174.3 million, or 65.9%, from the previous year. This decline is largely due to the absence of major commercial permits during this period, with high interest rates and rising construction costs continuing to be key challenges.

As of April 2025, oil is down 19.08% compared to the same time last year. In contrast, natural gas has risen significantly, showing a 51.06% year-over-year increase. The number of active oil rigs decreased slightly, with one fewer rig operating between March and April. In agriculture, wheat prices have fallen 15.12% year-over-year, while corn is down 4.61%. Cotton has seen a sharper decline, dropping 17.09% from last year. On the other hand, fat cattle prices are up 16.22%, contributing to a 1.14% increase in milk prices. Most, but not all, of the region has received rainfall — in some areas, the amounts were quite significant. Planting is underway, with hopes for continued rains throughout the season.