This marks the first edition of our revised Economic Monitor report. Our goal is to provide a monthly snapshot of the economic climate so as to allow our local business leaders to make more-informed decisions. By upgrading the Monitor with a more robust level of information, we hope that readers will have a better sense of our economy today and tomorrow.
In order to accomplish this goal, we have entered into an agreement with the Federal Reserve Bank of Dallas to leverage their Texas Outlook Survey on a local basis. Each month, we will survey select companies in the manufacturing, retail, and service sectors to garner an assessment of their recent activity as well as their outlook for the near future. When combined with other economic indicators, we believe that this information can become a useful tool for companies of all sizes.
Economic Survey Results
Note 1: With the economic survey being such a new instrument for us, it will be a couple of months before we can properly identify trending scenarios.
Note 2: Since we are still growing the number of participating companies, response totals are fairly small.
The month-over-month evaluation of Round Rock’s manufacturing sector could best be described as a “mixed bag.” Overall, positive indicators included in production, capacity utilization, volume of shipments, and prices received for finished goods. The news was not as good for volume of new orders, growth rate of orders, unfilled orders, delivery time, and prices paid for raw materials. At the end of the day, the results point to an increase in business, but at a higher cost.
On the employment front, wages and benefits did rise as did the number of employees and the average workweek. This is understandable based on the increase in production, shipments, etc.
Even with the middling results, companies feel that both their month-over-month outlook and the evaluation of their general business activity has improved.
The next set of questions request a six-month look forward, and the responses point to a positive mood for our manufacturing sector. Answers reflected a belief in an increase in production, capacity utilization, the volume of new orders, the growth rate of new orders, and the volume of shipments. Manufacturers do, however, expect to see a hit to their margins as they anticipate to pay higher prices for raw materials and wages and benefits. They also are likely to hire more employees and to invest in some capital projects.
Round Rock’s retail sector generally reported December to be a good month. Store-front and internet sales were up on a month-over-month basis. This point aligns with the trend in the city’s sales tax collections for the better part of a year. Retailers also felt more confident about their general business and overall outlook in January. These positive indicators also meant that retail businesses had higher wages and benefits, inventories, and capital investment.
The six-month view had a number of optimistic responses. Business leaders feel that both their bricks-and-mortar and internet sales will be up between now and June. They reported that they expect to see wages and benefits continue to rise as well as input prices. In order to overcome these upticks in cost, they expect to have to raise prices.
The service sector respondents were, by far, the most enthusiastic of all three industry types. They reported increases in revenue, number of employees, average employee workweek, wages and benefits, input prices, selling prices, and capital investment. The only category that didn’t see a boost was the number of part-time employees. Sector leaders also saw their outlook and evaluation of the level of general business activity improve.
Respondents generally feel that the market will continue for the next six months. They anticipate growth in every surveyed category except for the amount of part-time employees.
After evaluating all three sectors, all signs point to a continued, albeit in a somewhat cautious manner, strong Round Rock economy. Anecdotal conversations with business leaders have provided concerns about the ongoing international trade/tariff situation, the rising of interest rates, and the availability of future employees; but overall the market seems to be on track to remain healthy.
Labor Market Information 
In December, Round Rock’s unemployment rate remained at an astonishing 2.7 percent, which is exactly where we were in December 2017. This is the lowest percentage for the city going as far back as 2007. This is also lower than all of our peer communities (i.e., Allen, Frisco, McKinney, Pearland, Plano, and Sugar Land) and all of our surrounding communities (i.e., Cedar Park, Georgetown, and Pflugerville) except for Austin, which had a 2.5 percent unemployment rate in December. Last month’s rates for Williamson County, the State of Texas, and the United States were 2.9, 3.6, and 3.7 percent, respectively.
Fortunately, our labor force has maintained its torrid growth rate. Since January 2017, our labor force has increased by 4,198 (6.4 percent) individuals, and we’ve needed every one of those workers as our employment total rose by 4,637 (7.4 percent) during that same time period.
Sales Tax Collections 
As referenced previously, the positive outlook expressed by local retail leaders is reinforced by Round Rock’s sales tax collections figures. January collection numbers show sixteen straight months of year-over-year collections for the city. The $6,584,924 collected is a 7.6 percent increase over January 2017 and is the tenth-highest amount in Texas for the time period behind only (in descending order) Houston, San Antonio, Dallas, Austin, Fort Worth, Arlington, El Paso, and Frisco.
Small Business Administration Loans 
For many entrepreneurs and small business owners, the United States Small Business Administration (SBA) is the key partner in their quest to access much-needed capital. Despite thoughts to the contrary, the SBA doesn’t issue business loans. Instead, they use the financial strength of the federal government to guarantee loans for new and small enterprises issued from financial institutions.
Knowing which institutions are actively participating in SBA-backed lending is important for a community with a growing entrepreneurial ecosystem. As such, we are beginning to include the total SBA loan amounts from Round Rock-area banks. These totals will be the accumulated total from the San Antonio District of which includes Williamson County. The other counties included in the district are:
Based on the SBA’s fiscal year 2018 (October 1, 2017 through September 30, 2018), there are nineteen financial institutions in the San Antonio District with SBA loan activity and operations in Round Rock. Those nineteen and their FY18 SBA loan amounts are:
Note 1: These totals are for the entire San Antonio District. Neither Round Rock- nor Williamson County-specific loans per institution data is available.
Note 2: These totals are the original gross loan amounts; not necessarily the amounts that the SBA guaranteed.
|A+ Federal Credit Union||$ 390,800|
|Amplify Credit Union||$ 4,957,000|
|BancorpSouth Bank||$ 574,000|
|Bank of America||$ 6,513,400|
|Berkshire Bank||$ 2,913,000|
|Branch Banking and Trust Company||$ 330,000|
|Capital One||$ 8,715,200|
|BBVA Compass Bank||$ 27,199,100|
|First Texas Bank||$ 428,800|
|Frost Bank||$ 16,840,400|
|Independent Bank||$ 1,360,800|
|JPMorgan Chase Bank||$ 16,815,300|
|PlainsCapital Bank||$ 5,131,500|
|R Bank||$ 252,000|
|Randolph-Brooks Federal Credit Union||$ 10,655,900|
|Regions Bank||$ 3,714,000|
|SouthStar Bank||$ 3,666,300|
|University Federal Credit Union||$ 1,121,000|
|Wells Fargo||$ 19,920,300|
Based on its population and economic vitality, Williamson County is the third-highest SBA producer in the San Antonio District. Only the much-larger Travis and Bexar Counties outpace it. For FY18, Williamson County generated 115 loans with an original gross amount of $59,461,100.
 Source: Texas Workforce Commission
 Source: Texas Comptroller
 Source: U.S. Small Business Administration; San Antonio District Office