Is Lubbock Recession Proof?

Lubbock on list of top cities to weather recession

Friday, October 17, 2008
Story last updated at 10/17/2008 - 2:07 am

Is the country in or headed for a deep recession?

If so, be happy you're living in Lubbock.

A report published by Business Week ranked the Hub City among the 20 safest places to live in the U.S. during a major downturn where vast portions of the population are employed by government, health care, education, agriculture and legal services.

"I think it's totally logical and accurate," said Gary Lawrence, CEO for the Lubbock Economic Development Alliance who examined the report and wasn't at all surprised by its findings.

Business Week compiled the data with the help of PolicyMap.com, which made use of extensive demographic information in determining which cities would stand up best over the course of a recession.

Of the 20 Metropolitan Statistical Areas selected, Lubbock ranked 11th based on what the authors described as "layers of protection" involving health care and education sectors as well as its locale inside an energy-producing center.

Corpus Christi was the only other Texas city ranked in the report.

Amarillo economist Karr Ingham, who publishes the monthly Lubbock Economic Index on behalf of Lubbock National Bank/LEDA, said the report's premise has some roots.

"I've always wondered how Lubbock shows up in these reports," he said, alluding to another report two weeks ago by bond rating company Moodys, which also cast Lubbock in a good light.

"Lubbock always seems to come out on the favorable end of these analyses," said Ingham, who has followed the area's economy for a dozen years.

"One thing we know about the Lubbock economy is when it's put to the test, it just dusts itself off and continues to grow at modest, but steady pace," he said.

He said that's been the case during cycles of drought and energy busts.

Scott Hein, Texas Tech's Robert C. Brown chairman in finance and director of Tech's School of Banking, cited a strong community bank system as one more factor in Lubbock's favor.

"Lubbock is blessed. Yes, we do have education, health care and retail, which serve the surrounding communities, but I think one of our bigger strengths is our banks," he said.

He said unlike other cities, Lubbock's conservative community banking system still has money to lend, unlike other larger free-lending institutions that are now caught in a much publicized national credit crunch.

Greg Garrett, president of the Lubbock Association of Realtors, said he believes the Hub City would stand up in the face of recession.

"We're not recession proof, but I think we would hold up much better then some other cities out there when you look at what we have, including a stable real estate market which we didn't artificially inflate," he said.

College towns tended to dominate the Business Week/PolicyMap rankings, with the authors noting that while they don't necessary flourish during down times, "They don't go out of business either."

Lawrence said the presence of Texas Tech, Lubbock Christian University, Wayland Baptist and South Plains College also supports the study's findings on education.

"I think that (assumption) is correct and plays out that way. Now it's been documented by a major periodical," Lawrence said.