Lubbock’s economic activity climbed to an all-time high in January with wage and salary growth, consumer spending and investment leading the way, according to the Lubbock Economic Index released by Chip Gilmour, senior vice president at Lubbock National Bank.
“This is the highest the index has ever been,” Gilmour explained. “It follows nearly five years of healthy increases.”
This peak was matched only in November 2016 and is 2.3 percent higher than a year ago. Optimism was the word for Gilmour and Eddie McBride, President and CEO of the Lubbock Chamber of Commerce, who joined Gilmour to discuss the bullish report.
“There has been a big bump in consumer confidence,” said McBride, pointing to CNBC’s 1st Quarter Small Business Confidence Index. It rose 5.2 percent – its largest jump ever – between January and February.
“I can’t help but think that it’s the tax reform act,” McBride said. The Lubbock Chamber’s survey of its members on the likely effects of the new tax law approved in December showed 71 percent of the members believe it will lower their taxes.
Twenty-eight percent of the businesses plan to give bonuses or increase salaries and employment, McBride explained, and 20 percent plan to invest in new equipment.
Gilmour and McBride expressed confidence in Lubbock’s economy this year, but pointed to a couple possible clouds on the horizon: the drought and new import tariffs proposed by the Trump Administration.
“We are going through the driest period in Lubbock’s history,” Gilmour noted.
McBride added, “It’s worrisome right before the planting season.”
Texas is the nation’s largest exporting state and could be affected with new barriers to Texas exports if other nations retaliate against new U.S. steel and aluminum tariffs.
McBride said he also had his eye on NAFTA negotiations because it could affect the market for Texas exports.
“The jury’s still out,” McBride said.
Lubbock National Bank Senior Vice President Chip Gilmour briefs local media each month on the report.