Local Economic Indicators Show Continued General Uptrend | Local News

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The latest economic indicators released by the Texas A&M Private Enterprise Research Center show continued growth in the local economy, despite declining real wages in the first quarter of 2022.

Sponsored by the Brazos Valley Economic Development Corporation, the economic indicators track three monthly indicators — unemployment, non-farm employment and total taxable sales — as well as quarterly wages. All three monthly metrics reflect data through July and are also adjusted for inflation and seasonality, so it’s a more accurate month-to-month comparison.

The report showed that the Business Cycle Index, which looks at the four average metrics for the region, including Brazos, Robertson and Burleson counties, recorded a 1.1% increase from June to July, rising to 222.

Dennis Jansen, director of the Private Enterprise Research Center (PERC), said there is a complex statistical model used to find the percentage increase and the index; however, the concepts are simple and based on what is good or bad for the economy. Using the metrics as examples, he said, the rise in employment is good, as is the fall in unemployment.

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“It’s almost like we add up those series and kind of take the average change, and if the average change is positive, that’s a good thing, and our index goes up in value,” he said. “If something bad happens, like when unemployment spiked during COVID, and our index goes down.”

Matt Prochaska, president and CEO of the Brazos Valley Economic Development Corporation, said he was pleased to see the index rise, saying it shows the economy’s continued recovery from the COVID-19 pandemic plunge. 19. He also noted the greater increase in the recovery line compared to the pre-pandemic line.

The local unemployment rate fell to 3.1% in July from 3.2% in June. The drop was similar to the drop in statewide unemployment from 4.1% to 4%. July’s 3.1% unemployment rate makes the College Station-Bryan area the third-lowest MSA, or Metropolitan Statistical Area, in the state. The two lowest are Amarillo and Austin-Round Rock, which both recorded unemployment rates of 2.9%. The MSA, including McAllen, Edinburgh and Mission, had the highest unemployment rate at 7.4%.

Jansen said those unemployment rates are low by historical standards, saying it indicates a “very tight labor market.”

Local non-farm employment rose 0.3% from June and was 3.4% above the pre-pandemic peak in February 2020.

Total taxable sales, which represents what people spend in the local economy, also rose 1.2% from June to July.

Andy Rettenmaier, associate executive director of PERC, said it’s encouraging to see real sales increasing, even when adjusted for seasonal variations and inflation.

According to the report, quarterly real wages were the only measure to show a decline, with the first quarter being 4.1% lower than the previous quarter. The drop is the result of a 2% increase in prices and a 2% drop in total wages paid; however, salaries were still 10% higher than in the first quarter of 2021.

Jansen said real wages, adjusted for inflation, have been falling across the country since January 2021 and only recently started to slow. The decline is not true for every individual or in every industry, but reflects an average trend, he said.

He said he believes inflation contributed to the decline.

“People’s raises haven’t kept up with inflation, so their purchasing power is down, and that’s probably one of the reasons people don’t like inflation so much,” he said. Jansen. “This pattern has been going on for quite a while. It would take quite a lot of wage increases beyond the rate of inflation…to get back to the purchasing power of wages we had in January 2021.”

Inflation is something to watch closely, with Rettenmaier saying rates are unlike anything seen since the 1980s.

Overall, Rettenmaier said, the local economy is doing well right now.

The report also included hotel revenue, adjusted for inflation, showing the first six months of 2022 was 97% of the first six months of 2019. The second-highest spike in hotel revenue came in October 2021, just behind the highest month in October 2016. The trend points to increased hotel stays during the football season.

Prochaska said the region benefits from the success of school districts and its partnerships with higher education and workforce training through Texas A&M, the Texas A&M University System and Blinn College District.

“These are all huge advantages and assets for us from the point of view of attracting major employers who are looking for where to put their next site,” he said, saying that Bryan and College Station are not only compete, but win economic development projects.

The university system and its agencies also help protect the local economy during economic downturns, he said, and talent within organizations helps the recovery process.

Another benefit is Brazos Valley’s placement at the center of the Texas Triangle, geographically central to Houston, the Dallas-Fort Worth Metroplex, and Austin and San Antonio, claiming it allows employers and employees to to be within reach of large metropolitan areas without some of the challenges associated with large cities.

When it comes to attracting new business, Prochaska thinks just having the economic indicators is an advantage, saying it helps businesses compare the local area in an apple-to-apple fashion with the big ones. metropolises when deciding where to invest.

“What’s really exciting for us from an economic development perspective is not just that the numbers are out there, but the numbers are showing an upward trend,” he said.

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