Lubbock economy growing better than the nation, fueled by consumer spending, low jobless numbers and more
Nearly eight years into an economic expansion, Lubbock’s economy is still growing strong. It’s growing faster than the U.S. economy. The Lubbock Economic Index grew 5.8 percent at an annual rate in the second quarter and 2.7 percent in June compared to June 2018.
“Economic growth in Lubbock has actually gained momentum in 2019 and certainly did so the second quarter of the year,” said Randy Laycock, senior vice president at Lubbock National Bank, while briefing media on the bank’s monthly Economic Index report.
“We've always talked about how diverse the economy is for Lubbock. That keeps us from those highs and lows we see in other areas of the country.”
Consumer spending was a big part of those numbers:
- Inflation-adjusted consumer spending spiked 14.7 percent according to June sales tax receipts.
- Taxable spending in the second quarter rose 6.5 percent compared to the same period a year ago.
- Year-to-date consumer spending is up 4.7 percent compared to 2018.
- Inflation-adjusted auto sales rose 7 percent in June compared to June 2018.
- Hospitality and travel, measured by people flying from the Lubbock airport have also fueled the local economy, each growing 9 percent year-to-date.
“I believe consumers still have confidence and are willing to spend those dollars,” Laycock said. Behind that spending is job growth.
“Employment has shown steady and continuous growth for seven straight years,” Laycock said. “Lubbock has not experienced that year-over-year decline in employment since March of 2012. Over that time, we've added over 19,000 jobs.”
Job figures for June show an increase of 2,300 jobs compared to June 2018, or a 1.5 percent increase. Unemployment is June was 3.2 percent, the lowest June figure in more than 20 years.
Other engines powering the Lubbock economy include:
- Inflation, measured by the Lubbock Consumer Price Index, declined slightly to 1.8 percent. While most components of local inflation were slowing, steady population growth kept upward pressure on the cost of housing. So, local inflation is higher than Dallas at 1.5 percent and Houston at 0.8 percent.
- Total sales of existing homes were down 14 percent compared to the June record of 482 sales closed in 2018, but the second-quarter and year-to-date sales are 1 percent higher than a year ago.
- The average price of those sales is 5.7 percent higher. The increase in second-quarter prices was 6 percent and year-to-date was 6.5 percent higher.
- Construction activity in the city was higher in the first half of the year compared to 2018. The inflation-adjusted value of building permits issued in the second quarter was 22 percent higher and total year-to-date is 18 percent higher than the first half of 2018.