Project values, gross sales peaking

Economy stable say analysts

Posted: Sunday, December 11, 2005

The value of Kenai Peninsula Borough construction projects reached an all-time high and gross sales increased by 15.7 percent, leading borough analysts to describe the economy as stable, but faced with unrest, according to a government report.

In the borough’s Situations and Prospects issued in November, Jeanne Camp, economic analyst, reported, “Total permit values during 2004 were $84,041,457, a 92.7 percent increase over 2003 permitting ... a new record high, overcoming the 1995 total ($61.5 million) when Seward’s SeaLife Center was permitted.”

The report also said borough gross sales during the year passed the $2 billion mark, reaching $2,222,411,066, after gaining 2.2 percent in the prior year when sales totaled $1,920,037,461.

Sales in Kenai rebounded from the closure of Big Kmart with Home Depot’s first full year of operation.

Kenai sales reached $469,314,722 for the year.

Sales in other incorporated cities also increased. Seldovia sales were up 14.7 percent to $8,325,201. Soldotna sales increased 6.9 percent to $361,195,645. Seward sales were up 5.6 percent to $166,213,217. Homer sales edged up 3.5 percent to $283,682,519 — the slowest growth of the incorporated cities, according to the report.

In the construction industry, where growth is tracked by permits issued by cities within the borough, 312 permits were issued during 2004. The number of permits was down 7.1 percent from the 336 permits issued in 2003, but the dollar amount of construction was up.

Soldotna permitted the $21,384,000 Central Peninsula General Hospital expansion, an addition and remodel of the Fred Meyer store, a new Trustworthy Hardware store and other projects.

The city’s $37,296,926 in permitted projects during 2004 equaled 44.4 percent of the borough’s total. Homer, with $24,070,631, accounted for 28.6 percent of the total.

Seward issued construction permits totaling $17,711,150; Kenai had a total of $4,786,550; and Seldovia issued permits totaling $176,200.

New residential values increased by 1.3 percent, and alterations or additions to residences increased in value by 26.3 percent for the year.

The Situations and Prospects report states “the commercial fishing industry has suffered from low prices and ... low production over the years,” but adds, the Kenai Wild quality-based marketing program “has helped to revitalize the commercial fishing industry.”

In the salmon fishery, a total of 818 active permits harvested 67,301,637 pounds of fish, which represents 9.6 percent of the state’s total.

Preliminary reports from the halibut fishery indicate 17,997,680 pounds of commercial halibut were brought to borough ports.

Of that total, Homer reported 820 landings with 10,666,315 pounds — the highest port total. Seward had 439 landings with 7,011,365 pounds. Kenai had 42 landings and Ninilchik had five.

In the oil and gas industry, oil production decreased and natural gas production increased from 2003.

Cook Inlet well logs showed 8,220,000 barrels of oil were produced, a 20.3 percent decrease from the previous year.

Natural gas production of 249,587,000 cubic feet was a 20 percent production increase.

Oil production continued to decline in Cook Inlet, the report stated, but natural gas exploration and development continued to rise.

Summer visitor counts across the borough were up 4.5 percent with 97,657 people counted in 2004, compared with 93,412 in 2003, but nearly half of the cruise ship dockings moved from Seward to Whittier.

The number of dockings in Seward dropped from 101 in 2003 to 52 in 2004, according to the borough report.

Overall the Situations and Prospects report states, “Diversity provides strength to (the Kenai Peninsula Borough’s) seasonal economy.”

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