Bryan-College Station retail spending pace picks up
By SOMMER HAMILTON
Eagle Staff Writer
Retail sales in the Bryan-College Station area jumped 6 percent in August compared to a year earlier, propelling the economy to a level of consumer activity it hasn’t seen since 2000, an economist said last week.
Post Oak Mall operators point to the diversifying climate of more stores and name-brand selection as the main driving force behind those gains.
With more retail stores opening locally — including new sites expected at the mall and shopping centers that feature such stores as Bed, Bath & Beyond, World Market and Furniture Row — people can spend their dollars locally instead of driving to Houston or Austin for specific purchases, retailers say.
Retail sales were up 5.3 percent over the first eight months of 2004 than during the same period in 2003, said Amarillo economist Karr Ingham, who compiles a monthly economic index for The Eagle.
“People who live and work in that part of the world now feel they have some money to spend, and they don’t mind turning it loose,” Ingham said. “People are spending money at a pretty decent clip now.”
Consumer spending, measured by taxable retail sales in the area’s stores, nearly matches figures for the same January-to-August span in 2000, which was the last year the area — and the nation as a whole — saw a growing economy, Ingham said.
The dot-com bust and Sept. 11 attacks pushed the national economy into a downturn. But as most of the nation was recovering from consumer spending weakness, Ingham said the Bryan-College Station area remained insulated from that recovery — until now.
Though local retail sales figures have grown since sales bottomed out in 2001, they still haven’t surpassed the 2000 high level. Ideally, retail sales would have grown an average of 3 percent to 4 percent each year since 2000, Ingham said.
“We haven’t even quite clawed our way back to where we were in 2000,” he said.
According to preliminary figures, retail spending is expected in September to finally outpace the retail sales of 2000, Ingham said.
Joan Ghani, marketing director for Post Oak Mall, said most of August’s spending in the mall was on such necessity items as clothing and shoes. She said part of the increase in retail spending in August can be credited to where the tax-free holiday fell — in 2003, many retailers calculated it in their July tallies, but in 2004 it was added to the August retail figures.
“Luxury items didn’t fare as well,” Ghani said. “People weren’t buying jewelry and gifts. People are spending what they need to spend on necessities like apparel.”
Overall, the Bryan-College Station area’s economy has grown about 2 percent during 2004, earning a 107.7 index rating for August, Ingham said.
Ingham began monitoring the local economy in 2000, rating Bryan and College Station at 101.5 on the index. In August 2003, the area rated 105.4.
The index has a base of 100.0. A community’s rating can increase or decrease depending on a variety of economic factors, including the employment rate, retail sales, the number of new home permits issued and the number of existing homes sold.
Ingham said home sales and new homes being built helped the local economy grow since 2000. But the number of permits issued to build new single-family homes fell by 8 percent from January to August. From January to August of last year, 699 permits were issued. That number was down to 643 for the same period this year.
Jack Harris, a research economist at Texas A&M University’s Real Estate Center, said excess housing inventory from a building boom in 2003 makes the numbers for this year appear artificially low. More than 125 new building permits were issued each month from March to June 2003, but in 2004, the highest number of permits issued in a month was 123 in March.
“We just didn’t have that big surge this year,” he said. “We just built so many houses I think we’ve housed everyone.”
But home sales still are posting gains, with more than 1,570 homes sold year-to-date. That is 200 more than in 2003, a 15.6 percent increase.
Harris said builders might have “gotten ahead of themselves” and the housing market now is playing a game of catch-up. But either way, he said, the local home-buying market is strong.
“As long as existing home sales are up, [builders] are going to get their due,” he said.
Ingham said auto sales increased 5.2 percent compared to last August. During an already sluggish year for the auto industry, that gain pushes year-to-date sales to a slight — 0.4 percent — increase. But auto retailers are almost on an independent economic cycle, Ingham said.
“Like here, everywhere else people are just not spending as much money on cars as they did last year,” he said.
By early 2005, Ingham said, he expects to see a turnaround in car purchases. Those who bought cars during the low-interest seasons of the past few years might need a new car by then, he said.
Job growth also was high in August, Ingham said, with 77,700 positions available, 2.6 percent higher than last August. For the year so far, the Bryan-College Station area has added 2.3 percent more jobs than the first eight months of 2003, he said.
By the end of the year, Ingham said, he expects the area’s economy to have grown by 3 percent over last year. He says the area is well on the way toward that mark.
“This is an economy that’s still gaining momentum,” Ingham said. “We’re at the tail end of the recession and not even yet in what will likely be a period of steady and strong growth.”
• Sommer Hamilton’s e-mail address is email@example.com.