MCALLEN, RGV – The McAllen Chamber of Commerce recently released its February 2018 Economic Pulse and results show that the city dropped a few percentage points in retail sales, lodging and border crossings, as compared to a year ago.
Eduardo Lopez, chairman of the McAllen Chamber of Commerce, discussed the February 2018 Economic Pulse report at a recent McAllen Economic Development Corporation meeting.
Comparing February 2018 and February 2017, and making an adjustment for inflation, retail sales decreased by 0.8 percent, lodging decreased by two percent and border crossings decreased by six percent, Lopez said.
While those three categories showed a decrease in comparison to the previous year, retail sales for February 2018 year-to-date (YTD) increased by 0.8 percent. Lopez said. However, lodging decreased by 14.3 percent, YTD, and border crossings decreased by 8.6 percent, YTD. Despite the results, Lopez believes the March numbers will show improvement.
“The good news is that retail sales tax have increased. We’ve seen a couple of months of increase especially in March because of Holy Week. Based on the indicators of the sales tax receipts, it was way better. A lot of it was local, disposable income that was coming into the market,” Lopez said.
“We also go by indicators of the bridge crossings and it was about the same as last year. Occupancy tax has not increased, but we’re being very hopeful. Here comes the summer months which are traditionally very difficult for hotels. I think next month’s report will be good.”
Lopez added: “Bottom line, February was way better than January and we think March will be much better as well,” Lopez said. “Not getting into politics, but the income tax, and the extra money people have, I assume that is why (things are better).”
Listed below are key points the McAllen Chamber of Commerce Economic Index highlights in its February 2018 Economic Pulse:
• The McAllen Economic Index declined for the fourth straight month in February retreating to 184.3 for the month, down from 184.7. In January, and down 1.4 percent from the February 2018 MEI of 187.0. The February decline continues a general pattern of weakness in place since early 2017; the McAllen Economic Index peaked at 188.3 in December 2016.
• General spending is flat thus far in 2018 while auto sales are on the rise; existing home sales were sharply higher in February, but construction and home building are lower for the month. Employment growth continues in the two percent range and the unemployment rate is lower compared to year-ago levels.
• Real (inflation-adjusted) spending per February sales tax receipts (for McAllen, Edinburg, Mission and Pharr) was down just slightly in February compared February of a year ago and is up by less than a percent for the first two months of the year. For the 12 months ending February 2018 general real spending is down by about two percent compared to the preceding 12-month period.
• Auto spending was stronger in February, though, with inflation-adjusted spending on new and used motor vehicles up by nearly five percent for the month and seven percent for the year-to-date. Hotel/motel activity remains on the decline, down by two percent for the month and over 14 percent in the first two months of the year.
• Building permits were down by 26 percent in February, the tenth double-digit percentage year-over-year decline in the last 11 months. Through February, the real permit valuation total is down by 22 percent compared to the January to February 2017 total. The number of new single-family housing construction permits is down by about 15 percent though the first two months of the years as well.
• Home sales activity continues to expand sharply with record numbers of sales thus far in 2018. February home sales set a record at 212, an increase of 46 percent compared to February of a year ago and the number of closed sales in the first two months of the year – also a record – is up by some 30 percent year-over-year. The average price of those sales was slightly lower in February but is up by 3.7 percent for the year-to-date.
• The real total dollar volume of residential real estate activity is easily at record levels as well posting a 39 percent year-over-increase in February and a 31 percent increase for the year thus far compared to the first two months of a year ago.
• Over 5,000 jobs were added to the McAllen metro area economy over the last 12 months for a growth rate of 2.0 percent. That pace of year-over-year growth ranks 11th among the 26 metro areas in Texas for February. The McAllen city unemployment rate continues to come down at 4.9 percent for the month compared to 5.8 percent in February of a year ago. And again, employment data for McAllen and other Texas metro areas has been revised over the last couple of months and these statistics reflect the latest updates.
In his monthly analysis of retail sales across the Rio Grande Valley, Matt Ruszczak had a more positive outlook. Ruszczak is executive director of Rio South Texas Economic Council.
“There were some very positive numbers for retail sales in February. Cameron County is up 6.82 percent. Hidalgo County is up 7.05 percent. Combining the two counties, the Valley is up 6.97 percent,” Ruszczak said.
Ruszczak was comparing the February 2018, sales tax allocations made by the Comptroller to Valley cities and counties, with those of February 2017.
“There are lots and lots of green numbers on our sheets. In Cameron County, Brownsville up 6.06 percent, Harlingen up 9.77 percent, Port Isabel is up 1.90 percent, San Benito is up 0.40 percent, and South Padre Island is up 4.79,” Ruszczak said.
“In Hidalgo County, Edinburg is up 11.09 percent, McAllen is up 7.76 percent, Mission is up 2.65 percent, Pharr is up 9.28 percent, and Weslaco is up 3.33 percent.”
Looking at the year to date, which means October 2017, to February 2018, Ruszczak offered this analysis:
“Year to date, Cameron County is up 6.48 percent and Hidalgo County is up 4.65 percent. Combined, the two counties are up 5.24 percent,” Ruszczak said.
“That is strong growth. In Cameron County, only two out of 16 communities are down for the year. In Hidalgo County, only out of 22 communities are down for the year. Overall, as a region, our numbers continue to be strong.”
The year to date figures are: Brownsville, up 5.59 percent; Harlingen up 8.99 percent; South Padre Island up 5.19 percent; Edinburg up 4.89 percent, McAllen up 4.86 percent Pharr up 10.1 percent; and Weslaco up 2.94 percent.
“So, all in all, all the major players continue to have a very upward trend,” Ruszczak said.