Chip Gilmour and Mike Edwards
Goldilocks would love Lubbock’s economy heading into 2018 because it’s just right
Goldilocks would love Lubbock’s economy.
Not too hot, not too cold – just right.
That’s how 2017 was with more expected for 2018.
“The economy in Lubbock is great,” said Chip Gilmour, vice president of marketing and business development for Lubbock National Bank, as he released December figures from the Lubbock Economic Index.
The Index grew 2 percent in 2017.
What economists call the Goldilocks Economy is a growth rate between 2-3 percent, as measured by GDP growth.
Among other encouraging numbers – the addition of 1,500 jobs and a near-record low unemployment rate of 2.7 percent.
“And 2018 will be better because of the tax situation. People will have more money to spend,” Gilmour predicted.
He was joined by Mike Edwards, co-owner of Pollard Ford, as they briefed local media on December and 2017 year-end figures.
“Lubbock is the place to be,” Edwards said. “The economy is great and continues to be great and people are seeing more money in paychecks and spending more money.”
Gilmour and Edwards discussed the following:
- Rebounding auto sales after declines in 2015 and 2016. Inflation-adjusted auto sales rose a 5.6 percent last year and the fourth quarter showed an increase of almost a 10 percent compared to 2016.
- The economic expansion brought in two new dealerships last year, Edwards pointed out. The Infinity dealership on Spur 327 and Alderson’s Audi dealership on West Loop 289. Edwards said the most popular vehicle he sells are still pickup trucks – made even more attractive to buyers with improved ride, fuel economy and more features.
- Inflation has not been a concern. The Lubbock Consumer Price Index rose 2.2 percent last year, pretty much in tandem with the U.S. rate of inflation: 2.1 percent.
- While Lubbock’s inflation-adjusted retail sales were flat in December and the fourth quarter, the annual total last year rose 1.1 percent compared to 2016. Even in the fourth quarter, real spending was the third-highest on record behind 2015. Spending levels are generally near all-time highs but have been climbing slowly over the last two years.
- Continued healthy construction numbers:
- As anyone who drives around the city knows, the amount of new construction has been extraordinary. The inflation-adjusted value of building permits issued in 2016 and 2017 is by far the highest two-year total on record: $1.67 billion. The value of permits issued in December and the fourth quarter dropped from their 2016 levels, but the overall values for 2017 were up 9.9 percent.
- New home building permits set a new record for 2017 and outpaced 2016 by nearly 14 percent. With 1,352 permits issued, it marked the first time that home building permits broke the 1,300 ceiling.
- More than 4,000 homes were sold in Lubbock in 2017. It was only the second time existing home sales exceeded that mark; the first time was in 2016. The average sales price was up 2.7 percent over 2016. Fourth-quarter sales were particularly strong – totaling 903, a 5 percent increase over 2016 and a record amount for fourth-quarter home sales. The average home price of fourth-quarter sales was up 3.6 percent.
- Cotton and crude oil also contributed:
- Cotton prices ended the year at $72.34 a pound, up 5 percent from same month a year ago. The number of bales ginned in the South Plains fell by 4.8 percent.
- Regional crude oil prices ended the year at $54.57 per barrel, up 12.1 percent over 12 months. The rig count from RRA District 8A was up 11.8 percent over 12 months, and value of production for this area rose 17.9 percent, which is good for the West Texas economy. Gilmour predicted that the price of gasoline at the pump would remain fairly stable with prices averaging $2.30-$2.40 per gallon.
Lubbock National Bank Senior Vice President Chip Gilmour briefs local media each month on the report.
To see the full report, click here
To see the Lubbock Avalanche-Journal story, click here