It was a record-setting summer sales season for the peninsula’s economy, according to the latest financial quarterly report just published by the Kenai Peninsula Borough.
For the first time in the borough’s history, third-quarter gross sales topped the $700 million mark. Taxable sales also showed significant gains over the same period in 2004.
Gross sales during the July 1-Sept. 30 period, which includes the height of the summer tourist, construction and fishing seasons, totaled nearly $713 million, a 3.1-percent gain over the third quarter of 2004. Taxable sales those that produce revenue for the borough and its political subdivisions gained 3.8 percent, totaling a little more than $279 million.
Meanwhile, not only did the number of people available to work increase over the previous summer, but the total number actually employed also increased, the report said. That resulted in a seasonal decline in the unemployment rate. Unemployment was 7.2 percent in September 2005, down from 7.9 percent during September 2004.
The borough’s economic analyst, Jeanne Camp, produces the financial breakdown four times a year. Over time, the quarterly reports are indicators of general trends and of the overall economic health of the borough. The signs, Camp said, are positive.
“From all indications, from my point of view, we are doing great,” she said in an interview Tuesday. “We have ups and downs, but they are normal in any economy. But Kenai is rebounding from Kmart closing and Home Depot opening, construction is really strong in Soldotna and Homer, and sales are strong everywhere. These are good signs.”
Gross sales data showed, for instance, that four of the 10 active industries in the borough had double-digit gains, and five others single-digit gains.
But one, wholesale goods, registered a decline of 22.7 percent. That may be an issue of timing, however.
“That did puzzle me,” Camp said. “I would guess that it may be a result of people taking advantage of reporting sales data annually if they have taxable sales of less than $6,000 a year.”
That end-of-year data won’t be in and analyzed until sometime around March. When it is, it might alter the wholesale goods figures, Camp said.
Government gross sales actually showed the largest gain, 29.6 percent, but the overall effect on the economy was minuscule. The total monetary increase was only $2,723, insignificant in the borough’s total sales of $713 million, Camp said.
The truly big gainers included agriculture, forestry and fisheries (labeled the AFF sector), which jumped 16 percent, the mining sector, which grew 17 percent, and the construction sector, which climbed 11.6 percent.
The borough’s quarterly reports typically are published about three months after the end of the subject quarter. Hence, the third-quarter report does not include data from the entirety of 2005. However, it does compare annual sales of 2004 to those of 2003, and shows, for instance, that annual gross sales in 2004 topped the $2 billion mark for the first time in borough history, and total gross sales reached $2.24 billion.
The latest third-quarter data indicates that 2005 is likely to top figures from 2004.
“I don’t have a crystal ball,” Camp said. “But I would guess that would be true. There’s no reason to see that it wouldn’t be so.”
Camp noted there is some indication people may be spending somewhat less time shopping in the malls and more time shopping on line. If that’s true, fourth-quarter sales might show a decrease.
“But I don’t expect it,” Camp said.
Taxable sales increased in every city and in the unincorporated areas of the borough, including in Seldovia, which had seen taxable sales generally decrease over a 10-year span even as other areas registered sizable gains. The greatest one-year change came in Kenai (6.5 percent), where sales grew from $40 million to $42.6 million. Soldotna saw growth of 5.1 percent ($66.2 million to $69.6 million), adding to the overall strength of sales in the central peninsula region.
Homer’s taxable sales grew by a modest 1.7 percent, going from $49 million to $49.9 million, while across the peninsula in Seward taxable sales grew 3.5 percent, from $37 million to $38.4 million.
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