Lubbock Economic Index marks record increases across 2018

Lubbock Economic Index marks record increases across 2018
Lubbock Skyline (Source: KCBD)

LUBBOCK, TX (KCBD) - Lubbock National Bank released its analysis of the Lubbock Economic and Consumer Price Indexes over the course of 2018.

August of 2018 saw a record increase at 152.5, but after slight setbacks in September and October, the index for November saw another record increase to 153.1, a 1.2% increase from November of 2017.

Lubbock Economic Index from January 1996 to November 2018 (Source: Lubbock National Bank)
Lubbock Economic Index from January 1996 to November 2018 (Source: Lubbock National Bank)

The Economic and Consumer Price Indexes are based off of research and comparisons of statistics to give citizens and investors an idea of the direction of Lubbock’s economy based on data such as company performance, productivity, employment, and prices.

The Lubbock economy entered its eighth year of expansion in October of 2018, with only a brief dip in September casting a shadow on that number. Experts attribute that decline as an anomaly of a growing economy.

Two trends were identified as representing the current status of the Lubbock economy: A strengthening of general real spending based on Lubbock tax receipts and rates of employment growth.

“Real” in an economic sense is defined as value as compared to other goods or services, adjusted for inflation.

Weakness in general real spending in the early part of 2018 was counterbalanced by a third quarter increase of 4.2% and a fourth quarter spending activity that shows signs of continuing growth, marking Lubbock at a 2.6% overall increase for the year.

Rates of employment growth reflected in payroll employment was up for November by 2.6% over the previous year, ranking 7th among the 26 metro areas in Texas. Lubbock saw a net addition of an estimated 3,900 jobs over the 12 months ending in in November of 2018.

Positive growth remained generally consistent across a number of Lubbock markets, with the auto sector and hotel/motel activity showing strength and record growth numbers compared to 2017, and building and housing showed signs of stability as well.

November monthly home sales were down, but experts attribute that to a high total from the year before. The year-to-date average sales price showed an increase of 5% over the year before. Even though November monthly sales were lower, the inflation-adjusted dollar value of all those sales combined set a record for November, outpacing the previous year by 3.4%. The housing sales activity over the course of the year remained far and above record levels, at more than 9% compared to 2017.

The November building permit valuation total takes into account the total cost of a building project connected to a permit that builders apply for. That number was higher year-over-year, riding a wave of construction activity-related gains over the course of six years. The November permit total was the highest monthly total in five years and up by 4.6% compared to November 2017, adjusted for inflation.

Lubbock Economic Index from 2013 to 2018 (Source: Lubbock National Bank)
Lubbock Economic Index from 2013 to 2018 (Source: Lubbock National Bank)

Prices for consumers saw less inflation as compared to November 2017,with falling energy prices at the time contributing to much of the good news, such as the food/grocery prices that saw what were increases of 1% in August and 0.7% in September reduced to 0.6% in October and 0.5% in November.

Fuels and utilities saw some adjustment, from an October figure of 3.6% with the crude oil prices falling in November, to 3.2% in that same month. This reflected in the U.S. Consumer Price Index as well, showing price increases fall from 2.5% in October to 2.2% in November.

Lubbock Metro Area Economy (Source: Lubbock National Bank)
Lubbock Metro Area Economy (Source: Lubbock National Bank)

Copyright 2019 KCBD. All rights reserved.