Greater Waco Economic Report for May 2011.

Employment and consumer spending continue to hold back the Greater Waco Economic Index, which remained unchanged between March and April and fell below April of last year.

Specifically, Waco residents are clinging tightly to their money, housing starts have sagged and the number of people with jobs is growing but not enough to cause the unemployment rate to decrease.

Waco and its neighbors “are struggling to find their true post-recession bottom,” Amarillo-based economist Karr Ingham said in his monthly report.

But he said improvement is imminent.

Overall, the local economic index stayed at 102.5 from March through April. But that is down from 104.4 in April of last year.

The index uses data going back 10 years and applies a base line of 100 established in 2010.

Home prices, auto sales and hotel-motel tax revenues did show signs of vigor.

April 2011 inflation-adjusted spending on new and used autos rose more than 13 percent from April of last year.

“What’s causing that? High gasoline prices,” said Peter Kultgen at Bird-Kultgen Ford. “Small, more-efficient new cars are selling very well, and those sales are even translating into the used-car area.”

Regular unleaded gasoline was selling for an average of $3.69 per gallon in Waco on Wednesday, a dollar more than the $2.65 average per gallon one year ago, WacoGasPrices.com reports.

Sales tax figures show the Waco metropolitan area posted its lowest April total in household and business spending since 2005, and it is down nearly 6 percent from April 2010.

Year-to-date through April, spending is up 2.8 percent from the first four months of last year.

But that’s where the good news ends. Not counting last year, year-to-date spending is the lowest since 2005.

The cities for which sales tax is aggregated and analyzed include Waco and nine suburbs.

Waco’s sales tax revenues have not been stellar the past couple of years. But budget officer June Skerik said rebates so far this fiscal year are running $472,000 ahead of budget estimates.

On the jobs front, growth in payroll employment dipped below 1 percent between April this year and April 2010, with the Waco economy adding about 900 jobs in the past 12 months.

“The unemployment rate for the month and year-to-date remains over 7 percent, and is probably at its peak, but has yet to begin to show any evidence of entering into sustained decline at this point,” said Ingham, who prepares his report under the sponsorship of the First National Bank of Central Texas and the Tribune-Herald .

But Sarah Roberts with the Greater Waco Chamber of Commerce had a different take.

She said national magazines have touted Waco as a good place for employment and job-seekers nationwide have come here to find work.

She said it is admirable to maintain an unemployment rate around 7 percent under those conditions.

Other findings

Ingham’s report also included these findings:

* The value of building permits issued in April for all types of construction was the lowest since April 2000.

It was down more than 23 percent from April 2010, which was down 66 percent from April 2009.

Officials said the value of permits was destined to decline because construction projects related to bond issues for the city of Waco, Waco Independent School District and McLennan Community College are winding down.

But Roberts said about 500,000 square feet of industrial and office projects “are in the pipeline,” and should send the value of building permits soaring in the coming months.

* Homebuilding remains under pressure as well, with the number of permits issued for single-family home construction down nearly 15 percent in April compared to April 2010.

Also, existing home sales dropped 17.5 percent in April this year compared to last year. But Penny Dulock with First Title warned against making too much of that drop, adding that homebuyers in April last year could take advantage of government incentives.

Housing prices continue to hold their own in Waco, “which is a sign of economic stability,” Roberts said.

In April, the average price of an existing home was $129,246, up from $128,196 last April.

Ingham said the Greater Waco Economic Index peaked at 111.6 in September 2008 and fell to as low as 102.2 in December 2010 and January 2011, and is generally in that range through April.

“However,” he added, “the normal state of the Greater Waco economy is growth over time and there is little reason to suspect that, ultimately, the local economy will not find its way back to that path.”

mcopeland@wacotrib.com

757-5736