Gross sales top $2 billion

Diversity fuels growth of borough economy

Posted: Monday, October 22, 2007

Diversity is the strength of the Kenai Peninsula Borough's economy, reports the borough's financial analyst in the latest edition of Situations and Prospects.

Published each year, the latest issue, made public Oct. 11, covers in detail various measures of the economy for 2006. In an executive summary of the 298-page document, borough analyst Jeanne Camp noted economic activity continues to grow each year as technological advances and global awareness provide opportunities on the peninsula. The executive summary is available on the borough's Web site.

"Even as some sectors contract," she said, "others expand, resulting in continued growth of taxable sales and employment."

At the end of 2006, an estimated 51,350 people lived within the borough's 24,737 square miles.

During that year, gross sales, an important measure of economic vitality, grew 5.3 percent over the previous year. Taxable sales rose 7.5 percent.

Camp said labor force and employment hit all-time highs. Meanwhile, unemployment decreased to the lowest point ever and the annual average monthly unemployment rate was third-lowest on record.

"Taxable sales have increased year after year and reached $887,619,394 in 2006," Camp reported. "Gross sales growth is less stable, but the trend is definitely upward, topping the $2 billion mark for a third year as 2006 sales totaled $2,701,347,858."

Those trends appear to have carried over into the current year.

Figures from the first two quarters of 2007 reported recently by the borough in the Quarterly Report of Key Economic Indicators for the period ending in June of this year show taxable sales increased 5.4 percent over second-quarter 2006 numbers. Gross sales comparing the two periods show a small decrease of 1.1 percent. Camp said that amount would be easily overcome as late returns are recorded later this year.

During 2006, the Situations and Prospects report showed, two borough areas experienced double-digit gains in gross sales over 2005 Homer, by 14.9 percent, and Seldovia, by 10.1 percent. Meanwhile, Soldotna's gross sales grew 9.2 percent and Seward's grew by 4.9 percent.

The only city to show a gross-sales decrease down 2 percent was Kenai. Even the unincorporated areas of the borough saw a 4.5 percent gain in gross sales.

According to the report, Seldovia, Soldotna, Kenai, Homer, Seward and unincorporated areas of the borough saw increases in taxable sales.

The biggest gainer among the business sectors was retail sales, which posted a 6.9 percent gain in gross sales and 6.3 percent gain in taxable sales. Camp reported that the large retail sector had the greatest sales increase, and accommodation and food services also marked significant growth, posting some $9.4 million more in sales than in 2005.

"Certainly, a portion of that increase can be attributed to the Arctic Winter Games hosted by the Kenai Peninsula Borough early in the year," she said.

Camp noted that a new section appearing in the 2006 Situations and Prospects report shows how the borough and state economies are related. For instance, comparisons of the 1990 and 2000 census figures show that the Matanuska-Susitna Borough had the greatest population increase, but that the Kenai Peninsula Borough was second with a 22.7 percent growth rate in that decade.

The Mat-Su has continued that dominance ever since, growing by 30.1 percent between 2000 and 2006, while the KPB dropped to a 3.3 percent growth rate during that same period.

"Each of the five largest boroughs, and Alaska as a whole, are experiencing declining population in the 0 to 5 age group, and in the 30- to 45-year-old age group," Camp reported.

That the borough is a place attractive to older people is indicated by demographic figures showing the peninsula has, by far, the oldest median age of any of the five organized boroughs and Alaska as a whole. The median age in 2006 was 39.7 years.

It was just 36.3 years in 2000. Only Juneau, at 38.8, comes close. Alaska's median age is 33.5 years.

Hal Spence can be reached at hspence@ptialaska.net.



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