Kenai borough economy sees improvement in 1st quarter

KENAI (AP) -- The Kenai Peninsula Borough economy appears to be on fairly solid footing, according to the latest analysis of trade and industry data by the borough's Community and Economic Development Division.

But some borough officials pointed to areas of concern, including the current state of the Cook Inlet fishing industry and the relatively slow pace of growth in high-paying jobs.

The Community and Economic Development Division gathers and analyzes data from various sources including the borough and its cities and issues a quarterly report.

According to the division's first-quarter report, the first three months of 2002 proved better than the first quarter of last year in almost every category. Gross and taxable sales were up virtually everywhere in the borough and the employment picture also improved over the previous year's first quarter, the report said.

''We're just doing awesome,'' Mayor Dale Bagley said.

Bagley acknowledged that the outlook for commercial fishing isn't good this year, but noted that steps are being taken to try and improve that particular area of the economy, including a salmon-branding project meant to produce a better product and raise the stature of Cook Inlet-caught salmon in the eyes of consumers.

''Commercial fishing continues to suffer, but oil and gas are doing well,'' he said. ''And tourism, as a whole, will, I think, end up being good this summer.''

Among the report's clear first-quarter winners was the economy's mining sector, which includes oil and gas extraction and production. Its gross sales reached more than $31.5 million, an 11.8-percent gain.

The retail and service sectors, traditionally the largest industries according to the study, each reported gains. Retail's taxable sales reached $75 million for a 2.8-percent gain over last year, while the service sector saw $18.5 million in sales for a 2.4-percent increase.

Meanwhile, manufacturing, which includes oil and gas manufacturing and fish processing, doubled its gross sales over last year's first quarter, but actually showed a decline in taxable sales -- the only sector that did.

Others, including agriculture, forestry, fisheries, finance, insurance, real estate, construction and wholesale all registered gains in taxable sales.

All in all, taxable sales in the first quarter of 2002 reached $131.3 million, a 4.4-percent increase over the first quarter of 2001.

Camp agreed with Bagley that generally the borough's economic picture is good. Still, she said, there was room for concern about the largest sectors of the economy.

While the retail and service sectors provide many jobs, they are mostly low paying. They neither add much to the overall tax base nor provide much in the way of discretionary cash, the money people spend on things other than the necessities, she said.

''It concerns me that we have so much in the service and retail. I wish we had more growth in the upper-end jobs,'' she said.