LNB’s economic index: It can be a challenge keeping up with Lubbock economy’s record numbers
There were some mixed signals according to Lubbock National Bank’s monthly economic index for March – but the overall message is the Lubbock and area economy is still very strong.
Here are Chip Gilmour’s six takeaways from the report.
- The Index’s overall number fell a half-point to 148.5 from February, but up 2.3 percent over March of last year at 144.3. The number dropped due to a lower monthly building permit total, lower auto sales and hotel/motel activity and a year-over-year jobless rate increase. But, as you read on, there’s good news connected to some of those numbers. “The economy is healthy and should continue to be healthy and steady,” said Gilmour.
- The unemployment rate rose to 4 percent from 3.7 percent the month before. But here’s the first bit of that good news – the number of employed residents in Lubbock is not on the decline. Jobs were added at 1.4 percent in March over last March and 2.1 percent for the first quarter of this year over the first quarter of 2016. According to the report: “The labor force is growing at a faster pace, however, and the mathematical outcome is an increase in the unemployment rate.” That 1.4 percent growth, though, was lower than the 2.5 percent average for all of 2016.
- Construction is still hot, despite one number.
- That was for all construction permits – down 63.7 percent from March a year ago and just under 24 percent for the first quarter over the same period a year ago. The number last March was the highest ever recorded. And the numbers for the first quarter of this year are the third-highest quarterly total in the Index’s history.
“A lot of the commercial construction on the west side of Lubbock has been slowing also,” as spaces fill up, said Gilmour.
- But new home permits, home sales and average home price numbers were all positive and existing home sales returned to positive year-over-year territory.
- Retail sales were up 2.2 percent March over March and 2.1 percent this first quarter over 2016’s same period. This area has struggled recently and can indicate consumer confidence.
- Oil and cotton continue to rise.
“The Saudis and Russia cut back oil production, which hikes the price and is a positive affect on the energy sector” in West Texas, said Gilmour.
The barrel price in March was $45.50, up more than 30 percent from March of last year.
Gilmour said the price could rise closer to $60 later this year.
Cotton jumped to 74.65, up more than 37 percent from the previous March.
- The Lubbock Consumer Price Index crept up to 2.1 percent in March, above 2 percent for the first time in almost two years. The increase was driven by healthcare and energy costs.
Lubbock National Bank Senior Vice President Chip Gilmour briefs local media each month on the report.
To see the full report, click here