Economic index dips slightly on slow construction activity
Another month of slow construction activity and home sales caused the Lubbock Economic Index for May to suffer a marginal decline from April's levels.
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Another month of slow construction activity and home sales caused the Lubbock Economic Index for May to suffer a marginal decline from April's levels, according to figures released Friday.
The index, which uses January 1996 economic conditions as a baseline, was at 122.6 last month, down from 122.7 in April. The index was down 1.9 percent from 125.0 in May 2010, said James Arnold, executive vice president of Lubbock National Bank, the index's sponsor.
Arnold compared the last few months of LEI results to the movie "Groundhog Day" in which the central character sees the same events repeated day after day.
"We're continuing to slide along sideways," he said, adding different segments of the local economy start to show some improvement, and then another will pull the index back.
In this case, the main number holding things back is the construction sector.
"Construction is a big part of our economy," Arnold said. "When that number is positive, our economy is positive."
A year ago, permit values for May totaled more than $36.7 million, while activity last month was about $26.6 million, or a 27.7 percent decline. On a year-to-date basis, total permit values are down more than $60 million from 2010 activity, which represents a decline of 37.4 percent.
In addition, most housing categories have been trailing 2010 results. Last month, homebuilders took out 59 permits, just three more than they did in May 2010.
For the year to date, builders have picked up 250 permits, compared with 329 in the first five months of 2010.
Existing home sales in May were off 18.6 percent, coincidentally the same decrease posted for the first five months of the year. For the year today, 1,044 home sales have closed in Lubbock, down from 1,282 through May 2010.
Some of the issues of a slow residential real estate market have been offset slightly by sale prices running ahead of 2010's numbers. Average sale price on a Lubbock closing last month was $146,655, up 7 percent from $137,054 a year ago. For the year to date, average home sale prices were 1.3 percent ahead of last year.
On the plus side, retail sales in May were 2.3 percent greater than last May. For the first five months of 2011, retail sales have totaled more than $1.08 billion, about $40 million ahead of a year ago.
Auto sales also have continued an upward trend, with nearly $44.7 million spent last month, compared with more than $41.6 million in May 2010. For the first five months of this year, total auto sales volume is up 11.9 percent.
The economy apparently also got a boost from increased tourism. According to the report, lodging tax receipts collected by local hotels were up 10.5 percent from May 2010.
Arnold said part of the increase came from the number of youth sports tournaments Lubbock hosted last month.
Unemployment numbers also pose a paradox in the local economy. The city's monthly unemployment rate has averaged 6 percent over the first five months of this year, unchanged from a year ago.
While Lubbock has one of the lowest jobless rates in the state, the unemployment rate here is hovering around historic highs, Arnold said.
To comment on this story:
walt.nett@lubbockonline.com • 766-8744
leesha.faulkner@lubbockonline.com • 766-8706
Sources: Lubbock Economic Index, Lubbock National Bank
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