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Borough economy strong

Analyst: Second-quarter figures show sales at all-time high

Posted: Tuesday, September 11, 2007

Sales were at an all-time high, the value and volume of construction permits were topping the charts, and employment continued to increase on the Kenai Peninsula.

That was how the borough's economic analyst assessed second-quarter figures for 2007, published this month in the borough's Quarterly Report.

"By all measures, the Kenai Peninsula Borough economy appears strong and healthy," said analyst Jeanne Camp in an executive summary of the report.

According to borough data, there was a 5.4-percent increase in taxable sales for the quarter compared to the second quarter of 2006. While gross sales apparently dipped by a little over 1 percent, Camp said late-filed returns easily could reverse that.

Construction permitting was slow during the first quarter of 2007, she said, but the pace quickly changed in the April-June period where permit values set a new record high at more than $23.5 million.

"The next highest second quarter value occurred during 1993," Camp said, adding that year-to-date figures were the fourth highest since 1988, reaching nearly $26 million.

"Second-quarter permit volume was second highest on record with 137 permits issued, behind 2005 when 145 permits were issued," Camp said.

Unemployment numbers were all lower than during the same period in 2006. The year-to-date average unemployment dropped from 9.4 percent in 2006 to 8.6 percent this year, the lowest year-to-date unemployment rate on record. There was a notable difference in one employment statistic July's actual labor force the number of people available to work was slightly smaller than July 2006, Camp said.

She said there were other indications of the strength of the economy in figures from borough cities.

Kenai was in the midst of a retail growth spurt, with Wal-Mart planning on schedule and Lowe's pursuing purchase of property within the city.

In Soldotna, 27 new homes were under construction as well as law offices and medical facilities, she said. Atop that, the new five-lane bridge over the Kenai River has been completed, improving traffic patterns.

Over in Seward, there are remodeling activities at AVTEC, city hall and the senior center, and down in Homer, plans for a new city hall and civic plaza are being prepared, the hospital is being expanded, and the development of the Homer Spit continued, she said.

Agrium continues efforts around its Blue Sky Project working on an economic feasibility study for a coal gasification plant. ConocoPhillips, meanwhile, is awaiting a final determination on an application for extension of its Nikiski plant export license. Northern Dynasty Mines Inc., continues the public process that could lead to development of Pebble Mine.

Camp also noted Tesoro's completion of an upgrade to supply ultra-low sulfur diesel, CH2M Hill's purchase of VECO assets, and Pacific Energy's acquisition of Forest Oil's Cook Inlet assets.

The latest population data (from 2006) shows growth across the borough estimated at 0.2 percent for the year. Kenai grew about 1.3 percent, followed by Seward at 0.8 percent, Homer at 0.3 percent, Kachemak City at 0.2 percent.

Seldovia's population fell 23.3 percent. Soldotna's population slid 1.6 percent.

Hal Spence can be reached at hspence@ptialaska.net



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