Spending fuels growth in Waco’s economy as car sales stagnate and homebuilding soars | Local business news

Waco’s economy had so many bright spots in January that Karr Ingham, the West Texas numbers expert, may have had some nuance when preparing his monthly Greater Waco Economic Index which reveals a record start for 2022.

Vehicle sales and non-residential building permits did not join the party, both of which stalled behind January 2021 numbers, Ingham reported. It uses a year 2000 baseline to assess Waco’s housing, retail and lodging sectors and the direction the employment numbers are heading.

The First National Bank of Central Texas and the Tribune-Herald sponsor his reporting. Kris Collins, senior vice president for economic development at the Greater Waco Chamber of Commerce, explains facts and figures during Zoom meetings with invited business and community leaders. Attendees can also discuss trends in their own industries, with moderator Dan Ingham calling the presentations “elevator summaries.”

The GWEI raw score reached 145.3 in January, up from 144.6 in December and 131.6 in January a year earlier, Ingham said Thursday.

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A significant contrast emerged between general expenses and vehicle expenses. Local traders took advantage of $412 million crossing their palms in November, as evidenced by Ingham’s January report. That’s nearly 30% more than January’s $317 million of last year, and light years ahead of January 2000’s $219 million. Ingham uses sales tax totals in November and reported to the Texas Comptroller’s Office in December to arrive at January numbers.

Spending on automobiles hit a speed bump, according to Ingham’s report, from $82 million last January to $64 million this one.

“Inventory remains an issue,” said Ted Teague, who manages the Allen Samuels Dodge Chrysler Jeep Ram Fiat dealership. “Last month, 20% of the cars we sold were special orders. It doesn’t happen.

Teague said used car sales remain strong and should strengthen as tax season arrives and consumers apply tax refunds to down payments. But he said he sensed a problem on the horizon for first-time car buyers.

Automakers are building more premium vehicles, reducing their commitment to mid-priced models, Teague said. This could spell trouble for anyone looking for a used car at a reasonable price.

“In a few years, if you’re trying to find a car for your high school student, where are you going to find it? Teague said on the Zoom call.

Ingham said inflation is also taking the shine off of vehicle sales. It turned what would have been an 11% year-over-year decline into a 22% year-over-year decline in inflation-adjusted terms. In addition to inflation, the January total was in comparison to a strong January 2021. Ingham wrote that total auto spending for January 2021 was 20% higher than January 2020, 10% higher than the previous January.

Local homebuilders apparently caught cabin fever immediately after the Christmas lights went out. They secured 92 permits in January to build single-family homes in Waco, possibly in response to the city’s housing inventory running low on volume. Also in January, 259 existing homes were sold, an increase of 12% compared to the first month of 2021.

Those 92 permits represent “the highest January monthly total on record, and the third highest for a month on record behind only the 153 permits issued in August 2020 and the 109 permits issued in April 2021,” Ingham wrote.

He said January’s total for existing home sales also set a record, based on the Waco Multiple Listing Service.

The average price of a home changing hands in January was $291,942, up nearly 24% year over year. About two decades ago, during Ingham’s GWEI benchmark year, the average January home sale price reached $87,632.

Ingham has reported that its employment numbers are incomplete as the Texas Workforce Commission has not completed its processing of January 2022 data, an annual review process in which monthly estimates for the past two years, or more, are updated. updated and revised. This information “will also set the benchmarks for employment data going forward in 2022,” he wrote.

The Chamber’s Collins said Waco’s economy created 5,000 new jobs last year, adding about 15,000 since the employment sector bottomed in April 2020 during the initial siege. of COVID-19.

Spending on hotel stays has continued to rise, even as the summer vacation season approaches. It hit $5.3 million in January, a 65% year-over-year increase.

Building permits for non-residential structures — commercial and industrial buildings, for example — fell to $66 million from $85 million a year earlier. In January 2000, these permits amounted to $8.5 million.

“For now, it’s safe to say that the Greater Waco Metro Area economy experienced a year of strong recovery and growth in 2021 and started 2022 much the same,” wrote Ingham. “There’s little to no chance that revisions to last year’s jobs data will undo all of that.”