Bryan-College Station's economy ended last year strong after slight declines in November, and the long-term outlook remains positive, says an Amarillo economist who studies the area.
Karr Ingham said strong local spending and the addition of jobs over the past year, along with the presence of Texas A&M University and Blinn College, have helped keep the effects of the national recession at bay.
Looking ahead, Ingham said, there is concern about state funding for Texas A&M, and a temporary slowdown in the local economy may be on the horizon.
But because Texas A&M is a powerful driving force behind the economy, any funding shortfall should have minimal ripples.
"I'm not so worried about that," Ingham said.
Terry Pankratz, vice president for finance and chief financial officer for Texas A&M, said that state funding levels were still undecided but that officials had been encouraged by discussions with lawmakers.
In November, the governor's office asked Texas A&M to look for ways to cut costs, Pankratz said.
"We're being very cautions as to new initiatives ... because we want to make sure our funding is solidified," Pankratz said.
The national economy has caused a decrease in philanthropic donations to the university, he said, but the campus is by no means in a crisis.
"I think we're managing the effects of the economic downturn and we're dealing with them daily and looking for solutions to deal with them in a long-term fashion," he said.
Ingham said the region should expect continued economic growth in 2009, and it owes a lot of that growth to Texas A&M.
"Part of that has to do with the fact that it's a college town. It's a big college town, and there are just people there spending money," he said. "That just really helps to power that economy and provides a buffer on what goes in the broader geographic areas."
Consumer spending was up in 2008 for the fifth consecutive year, Ingham said. The increase from the previous year was nearly 6 percent, much higher than the typical 2 to 3 percent, he said, and "particularly impressive" in light of similar growth in prior years.
The region added more jobs, year over year, than any other metropolitan area in the state besides McAllen, Ingham said. The unemployment rate inched up over the course of the year, as it did everywhere, but the Bryan-College Station area still ranks as one of the best in Texas, he said.
"There are good things going on there," he said.
But it's not all good news.
Auto sales took a dive in the second half of the year, according to Ingham's statistics. Inflation-adjusted spending on new and used autos dipped by 12.8 percent in the fourth quarter, compared to the same period in 2007, finishing basically even with the prior year.
"Those big-ticket items seem to be the first to go when there are economic concerns. Those numbers have just been down pretty sharply but not even as bad as in other places," he said, noting that some states are experiencing 20 to 30 percent declines.
Existing-home sales also posted a slight decline in 2008, for the second consecutive year, and the number of sales declined in the fourth quarter by about 15 percent, Ingham said. Price growth remains firm, however.
Overall, homebuilding was down in 2008, posting year-over-year decreases in the first three quarters and for the year as a whole, with total permits down about 8 percent.
But the city of College Station issued 135 building permits for homes in December, compared to 17 in December 2007.
The oil and gas industry has been declining since September, and it's likely to get worse throughout the year, Ingham said.
"A word of caution, however: The national recession picked up momentum in the latter four months of 2008, and the state's oil and gas industry peaked in September and is now on the decline," he said. "The point is that the Texas economy, and Texas metro economies, may only just now, or going through 2009, be susceptible to these negative pressures."
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