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RALPH KINGSBURY: If recession has ended, numbers will improve

In a recent column, I wrote that Grand Forks and North Dakota had joined the rest of the world to a degree because of some bad economic news. This month's statistical analysis verifies my comments.

Ralph Kingsbury
Ralph Kingsbury

In a recent column, I wrote that Grand Forks and North Dakota had joined the rest of the world to a degree because of some bad economic news. This month's statistical analysis verifies my comments.

But in all honesty, I have to add the caveat of "just barely" or "sort of." That is, there are negative statistics in the local and North Dakota news, but not that many, and they're not nearly as bad as the numbers in many other places.

The monthly building permit report is probably the most negative report we have. But we must remember that a great deal of that stems from the lack of new building in the commercial sector.

We know that the national chains just haven't been building or even expanding into new areas over the past few years, but now, we hear stories about firms such as Olive Garden that are starting to look at expansion again.

If the business community has decided the recession really is over, we will see increases in the commercial category. In fact, I think there were many restaurant and big box chains that were seriously considering Grand Forks before all of this started, and it may be we are in for some significant commercial building.


New housing always has stayed at good levels, especially when we consider how young couples do not have the big families that couples had in the past. And as I have written before, I think new home construction is one of the best indicators of the long-run economic health of a community. It means people are coming here and intending to stay here.

Finally, we also know in the housing area that there has been a significant drop in apartments. With all the apartments that have been built over the past few years, it may just be that builders simply have caught up with the market. This area will be an interesting one to watch in years to come.

The table that concerns me the most in the short run is the city tax collections. I am talking about both the city sales tax and what I refer to as assessments, such as the 3 percent motel charge.

The city gets the money from the city sales tax about two months after the consumer had made his or her purchases. In other words, most of the $1.2 million the city got in October is from purchases made in August.

Those who apply for refunds have a fairly long period of time to do so, and there really is no way to track that lag, so we have to remember that the monthly data could be distorted because of these requests.

On the other hand, that factor should even out over time. This means the 12-month rolling collections give us the most accurate reflection of what is happening -- and those figures show almost a 6 percent decline.

That drop has been getting bigger as the year has gone on. The trend reinforces my thought that we are slowly joining the rest of the world's recession.

Then again, if the national recession really is over, then the 12-month rolling collections figure should start to improve.


For that matter, it also should get better as the Canadian dollar continues strengthening against the American currency. As more of our Canadian neighbors return here, we should see improvements in both the sales tax collections and the 3 percent motel collection.

Finally, I have been concerned about tax collections at the state level because I think both farm income and business income will be down substantially. That may still take place in the future, but to this point, it hasn't happened.

For the first three months of the new biennium, general fund revenues are almost 5 percent ahead of the legislative forecast -- and as the table shows, more than 120 percent ahead of the past biennium.

The budget kept a lot of money in reserve to cover any shortages, but those shortages haven't started to appear.

Reach Kingsbury at kae@invisimax.com or 738-4810.

Related Topics: LOCAL BUSINESS
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