March Economic Update

Dr. M. Ray Perryman

History

The Metropolitan Statistical Area (MSA) including Killeen-Temple-Fort Hood

• Ranks #5 among all MSAs in Texas in economic strength for four consecutive years(Policom.com)

• 14th fastest growing MSA in the Nation. (US Census Bureau)

• Ranks #1 in affordable housing (Coldwell Banker Home Price Index, 9/26/2007)

• Ranks No. 1 in renter livability (apartmentratings.com)

Current Indicators

Population Trends2000 Base Jan. 2008 Estimate Percent Change 2000-2008

Belton 14,623 16,953 15.90%

Copperas Cove 29,592 32,365 9.40%

Gatesville 15,591 16,223 4.10%

Harker Heights 17,308 25,160 45.40%

Killeen 86,911 112,998 30.00%

Lampasas 6,786 8,031 18.30%

Nolanville 2,150 3,015 40.20%

Temple 54,514 59,796 9.70%

Source: Texas State Data Center

Population Trends

2000 Base Jan. 2008 Estimate Percent Change 2000-2008

Bell County 237,974 277,743 16.70%

Coryell County 74,978 76,757 2.40%

Lampasas County 17,762 21,062 18.60%

Region/MSA 330,714 375,556 13.50%

Texas 20,851,820 24,105,417 15.60%

Source: Texas State Data Center

Unemployment Trends

Jan-09 Jan-08 Difference

Killeen-Temple-Fort Hood MSA 6.5 5.0 +1.5

State of Texas 6.8 4.7 +2.1

United States 8.5 5.4 +3.1

Source: Texas State Data Center

Housing

Months of Inventory…………………………..10

January 2009 Home Sales…………………..136

February 2009 Home Sales……........147 (+8%)

Typical Monthly Volume………………..…….200

Source: Jose Segarra

Housing

January 2009 Avg Price $114,000

February 2009 Avg Price $125,087 (+8%)

2008 Fort Hood Region Avg +2.94%

2008 US Avg -15.0%

Source: Jose Segarra

Killeen Building Permits

0

50

100

150

200

250

300

350

Killeen Retail Sales

Retail Sales increase from $1.3 billion in 2000 to $2.3 Billion in 2007

Sales Tax Revenues2009 Payments 2008 Payments % Change

Belton $810,777 $787,989 2.89%

Copperas Cove $875,659 $884,205 -0.97%

Gatesville $391,035 $391,467 -0.11%

Harker Heights $1,183,491 $838,580 41.13%

Killeen $4,497,345 $5,094,857 -11.73%

Lampasas $325,838 $310,415 4.97%

Nolanville $29,375 $34,633 -15.18%

Temple $3,898,981 $4,088,816 -4.64%

Texas/1133 Cities $1,046,328,600 $1,030,834,183 1.50%

Source: Texas Comptroller of Public Accounts

Sales Tax Revenue – February 2009State of Texas -2.6%

Gulf Coast

Houston +4.5%

Beaumont +58.04%

Sugarland +8.69%

Galveston +15.49%

I35 Corridor

San Antonio -4.61%

Austin -13.82%

Round Rock -23.16%

Georgetown -27.3%

Metroplex

Dallas -10.91%

Source: Comptroller of Public Accounts

Going Forward

Community Strengths• Fort Hood - $10.9 billion annual economic impact.

• Growing population.

• Location.

• Positive business climate.

• Talent, especially the pool of skilled veterans separating from the Army at Fort Hood.

• Strong defense contracting community.

Community Strengths Continued

• Racial/ethnic diversity and integration.

• Growing and affordable housing stock.

• Large inventory of service, retail and dining establishments.

• Central Texas Workforce Center.

• Killeen-Fort Hood Regional Airport.

• New convention center complex.

• Educational institutions.

Growth Opportunities

• Targeted Industrial Clusters

• Retail Sales

• Fort Hood Stabilization, Growth and Diversity

• Texas A&M University – Central Texas

• New Economy

Targeted Industrial Clusters

• Defense

• Healthcare and Bioscience

• Information Technology

• Business Services

• Transportation and Logistics

Retail Sales

2007 Retail Gap Analysis

2007 Retail Gap Analysis

Trade Area Population 226,930

Trade Area Household Income $54,164

Trade Area Per Capita Income $19,202

2007 Retail Gap Analysis

52 Retail Sectors

4 with Sales Surpluses- Mobile Home Sales- Motorcycle Dealers- Hobby, Toy and Game Shops- Misc. Retail Sales

2007 Retail Gap Analysis

Potential Sales $2,402,573,000

Estimated Sales $1,282,000,000 (53%)

Leakage $1,120,572,000 (47%)

Fort HoodStabilization, Growth, and Diversification

• Economic Impact of the Volunteer Army

• Lilly Pad / Shock Absorber Effect

• Medical Center

• Second Runway

Texas A&M University – Central TexasAcademic Economic Impact

Students Annual Impact Employment

1,000 $14.2 million 258

2,500 $37.2 million 677

3,500 $54.8 million 933

6,500 $106.5 million 1926

Texas A&M University – Central TexasResearch and Development Impact

• Technology Research Center

• Emerging Technologies– Healthcare– Defense

• Commercialization

New Economy

New Economy

•Manufacturing/Goods to Service/Knowledge

New Economy

•Place – Talent – Innovation are Linked

New Economy

•Military Communities Have access to Talent

New Economy

•Talent will populate, attract and create companies

New Economy

•Talent is Mobile

New Economy

•Talent will reside where it can live first, work second

New Economy

•Quality of Place is important

New Economy: Summary•Manufacturing/Goods to Service/Knowledge

•Place-Talent-Innovation are Linked

•Military Communities have access to talent

•Talent will populate, attract and create companies

•Talent is mobile

•Talent will reside where it can live first, work second

•Quality of Place is important

Place Design

Characteristics of Place Design

• Authenticity• Access to technology• Horizontal career paths• Immigration• Low barriers to entry• Diversity• Tolerance• Lifestyle opportunities