To quote the Oscar-nominated song from “The Lego Movie” – everything is awesome. Chip said this is one of the best reports he’s ever seen. Overall, another record number for the Index – 148.0 – up from 147.3 in September and from 144.6 for October of 2015. Underlying those numbers are impressive numbers in real estate, construction, retail sales and some key commodities. “We’ve seen consistent improvement in our economy for last the last five years. You want to see steady growth – no boom and bust – the steady stuff is comforting,” he said.
Speaking of housing – buy a house. The average home sale price – $184,673 – jumped almost 8 percent from October of last year and year-to-date the growth is more than 10 percent. “If your home increases 10 percent a year, that’s a good sign,” said Chip.
In construction, new home permits were a record 122 in October, 76 percent higher than October of the previous year. The value of all construction permits was more than $91 million – another record and 105 percent higher than October of 2015.
The October Index saw the first increase in retail sales this year – a healthy 7.5 percent jump from October of 2015. Chip said he could not say this was tied to the consumer and market confidence seen since the presidential election, but consumers were more positive in October. It will be interesting on the next few reports to see if retail spending follows the pattern we’ve seen in the stock market since the election.
Oil prices were 46.31 a barrel, almost 8 percent over October 2015 and cotton was $66.98, more than 12 percent over October 2015 – two key commodities for the West Texas economy. That’s also causing gas prices to inch back toward $2 a gallon. But even if we spend more on gasoline, there are so many benefits to the economy from rising oil prices, said Chip. “It’s helps employment. Chances are some of your retirement account or 401K are tied to the energy sector,” he said. And a lot of people who live in Lubbock commute to energy-related jobs in the Permian Basin or southern parts of the South Plains. As the oil and gas businesses recover it leads to more disposable spending, housing purchases and other positive impacts for the economy.
Lubbock National Bank Senior Vice President Chip Gilmour briefs local media each month on the report.