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N.D. bucks the trend

When I present my statistical reports next week, you will see the results of first quarter 2008 taxable sales and purchases for North Dakota. I want to say more about that report than I'll have room for at that time; so, I'm going to write about ...

When I present my statistical reports next week, you will see the results of first quarter 2008 taxable sales and purchases for North Dakota. I want to say more about that report than I'll have room for at that time; so, I'm going to write about it today.

The report shows that for the 20th quarter in a row, there is growth compared with the same quarter in the previous year. That means the last time there was a negative report was in early 2003.

Not only that, but the growth was 12.5 percent. That is a huge increase.

The past two to three years, farm income has been grown, and so has oil production income. In 2007 (and apparently carrying into this year), both of those sectors continued to grow.

Just as interesting and satisfying is the fact that the growth also is occurring in many of the Tax Department's sector classifications.

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For example, the transportation and warehousing classification grew by nearly 26 percent, and manufacturing was up 19.9 percent. Management grew by 11.6 percent, and information industries rose 10 percent.

The only significant drop was in the construction industries classification, which is one of the largest categories and is an important indicator of growth. The decline was nearly 18 percent. But, as in Grand Forks last year, 2008 followed a huge level of construction in 2007, and I think a lot of the decline was simply the need to complete some of those projects started in 2007. We will want to watch this category as the year progresses.

Analyzing the changes by industry shows the importance of diversity. Diversity is the key to maintaining growth or at least minimizing any declines. Industries can be in a state of decline for reasons beyond the control of anything we can do in North Dakota.

Of North Dakota's 15 industry classifications, only three were in decline. They were construction, which I mentioned above; arts, entertainment and recreation, which declined more than 13 percent; and educational, health care and social service, which was down less than 1 percent.

The category we may need to pay the most attention to is retail trade. For North Dakota, it was up by only 5.6 percent. Accommodation and food services also showed a smaller increase -- only about 8.9 percent. Taken together, the two categories are nearly 48 percent of total taxable sales and purchases.

Both categories grew by more than the rate of inflation, so there was real growth. Both categories also are important indicators as to how our citizens are reacting to the national economy. They show concerns about inflation, employment and our immediate future.

If we had not had the Canadian retail trade and accommodation spending, I wonder if either of these categories would have been positive.

In Grand Forks, all taxable sales and purchases increased by 5.4 percent. Retail trade increased less than 3.5 percent. Accommodation and food services was up only slightly more than 8 percent.

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Grand Forks started out very slow, even negative. It has only been during the past two months that we have shown any real increase in the retail sector. Considering this is first-quarter data when retail sales are their slowest, maybe we should be happy with these increases. I just expected more.

Of the 15 categories, Grand Forks had six that were negative. Fortunately, all six taken together account for less than 7 percent of the total trade.

In Grand Forks, retail trade accounted for about 61 percent of total taxable sales and purchases. The next largest category -- accommodation and food services -- was 17.5 percent of the total. Wholesale trade was just under 12 percent of the total.

This report certainly does not demonstrate any cause for concern at this time. North Dakota and many of its largest cities appear to have escaped the problems plaguing the nation as a whole.

Will we continue to dodge the bullet? So far, the answer is yes.

Kingsbury can be contacted at kae@invisimax.com , or (701) 738-0028.

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