Employment was up, fewer people were out of work, and record-high sales were driving up sales tax revenues during the second quarter of 2005, a clear measure of the Kenai Peninsula Borough’s healthy economy, according to the latest report from the borough’s Community and Economic Development Division.
The division publishes the detailed quarterly reports four times a year. The latest, released this week, covers April, May and June of this year, a period that includes some but not all of the warm season’s period of most activity.
According to an executive summary prepared by economic analyst Jeanne Camp, growth in the peninsula’s labor force a measure of the availability of workers has set new highs during five of the first six months of 2005, January being the only exception in the first half-year period.
“Employment has trended upward for the past several years, with both a larger labor force and increased employment, accompanied by decreasing unemployment rates,” Camp said.
Not only were more people at work, but per capita income was rising, too. Theory suggests, Camp noted, that that should translate into greater disposable income. In other words, people have more to spend.
Apparently they did. Records show gross sales and taxable sales (key for the coffers of the borough and its cities) hit record highs.
Second-quarter gross sales hit $521.6 million, an increase of 12.3 percent over that recorded in the second quarter of 2004. That’s a jump of more than $57 million.
Taxable sales gained 3.7 percent, Camp said, reaching $214.7 million, $7.6 million more than the previous year.
Retail sales, which recorded a 5.6-percent increase over second quarter 2004 figures, provided better than 60 percent of all taxable sales during the April-through-June period, Camp said. Sales of some $129.3 million were subject to borough and city sales taxes.
That meant people were shopping and contributing sales tax revenue to the operation of government services.
In terms of greatest percentage gain over second quarter 2004 numbers, the honor goes to the Transportation, Communications and Public Utilities (TCPU) sector of the economy, which registered an 87.2 percent increase in gross sales, a jump of nearly $31 million.
A boost in motor freight transportation and increasing electric services helped motivate the jump in the sector’s gross sales figures, Camp said.
In terms of taxable sales, however, the effect of that large increase did not produce a similar growth in tax revenue. The TCPU sector’s taxable sales grew only a little more than $500,000, just a 2.5-percent increase.
While a far smaller an economic factor in terms of dollars, the 46.5-percent increase experienced by the Agriculture, Forestry and Fishing (AFF) sector was notable. The sector registered gross sales of $5.7 million compared to the $3.9 million garnered in second-quarter 2004. Taxable sales within the AFF sector grew by 3.3 percent from $1.67 million to $1.73 million.
Camp credited increased activity by fish buyers during the quarter as helping to establish the higher levels.
Building trades experienced a jump during the early construction season, thanks to a healthy 52.5-percent growth in gross sales over 2004 figures, a $22.3 million increase over the $42.4 million registered in 2004.
Taxable sales, always far smaller than gross sales, nevertheless grew by 3.6 percent, from $2.9 million to $3 million.
A generally good early construction season both in commercial and residential building contributed to the overall boroughwide growth, Camp said.
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