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Robust oil activity fuels increase in 4th quarter taxable sales

Posted 4/14/10 (Wed)

By Neal A. Shipman
Farmer Editor

In spite of a general slowing of the state’s economy during the fourth quarter of 2009, fueled by a robust energy sector, Watford City as well as McKenzie County bucked that trend and continued to show positive growth according to a recent report by North Dakota Tax Commissioner Cory Fong.
During the fourth quarter, which includes the months of October, November and December, McKenzie County’s taxable sales and purchases were up 14.06 percent compared to a 7.9 percent decline statewide.
McKenzie County’s taxable sales and purchases in the fourth quarter of 2009 totalled $14,922,727 compared to $13,082,672 during the same three-month period in 2008.
Watford City’s taxable sales and purchases during the fourth quarter of 2009 were up 14.45 percent from the same period in 2008. During the three-month period from October  through December of 2009, Watford City had taxable sales and purchases of $13,545,250 compared to $11,835,010 during the same period in 2008.
Statewide, according to the report,  North Dakota’s overall taxable sales and purchases slowed by 7.9 percent, or by $269 million, compared to the same time period during 2008. Taxable sales and purchases, however, were up when compared to fourth quarter 2007 statistics.
“North Dakota experienced a record-setting year for taxable sales and purchases in 2008, and that level of growth was not sustainable,” said Fong. “When we compare 2009 to 2007, which is a more typical year, fourth quarter spending levels were strong and indicate that North Dakota’s economy remains on track.”
 The fourth quarter 2009 report shows growth of 10.9 percent or $307.8 million compared to the same timeframe in 2007. 
Seven of fifteen sectors reported growth during October, November, and December of 2009. The retail trade sector, the sector that is mainly looked to as a measure of the economy, was up the most in terms of dollars, growing $27.6 million or 2.3 percent compared to fourth quarter of 2008. 
“The retail trade sector is an especially important sector to watch during the fourth quarter because it encompasses the all-important Christmas shopping season,” said Fong. “So a strong showing in our retail sector during the Christmas season is an especially good sign. While other states continued to feel the effects of the recession, North Dakotans remained upbeat and continued to spend.”
Comparing the retail trade sector to the fourth quarter 2007, shows growth of 3.1 percent. The rate of inflation for the same time was about 2.1 percent.
The largest percentage increase came in the other services sector, which was up 13.2 percent when compared to 2008, while the mining and oil extraction sector was down 44.8 percent.
“The drop in the mining and oil extraction sector is not reflective of production, which continues to flourish, rather the drop simply reflects a supply buildup,” said Fong.
Of the 50 largest cities, the biggest percentage increases for fourth quarter of 2009 were Washburn, up 33.8 percent; Bowman, up 26.6 percent; Rugby, up 25.9 percent; New Town, up 25.6 percent; and Harvey, up 18.6 percent.
The four largest cities, Bismarck, Fargo, Grand Forks, and Minot, contributed $17.2 million in growth during the fourth quarter. Minot showed growth of 6.3 percent, or $14.9 million; Grand Forks grew 1.5 percent or $3.9 million, Bismarck grew 0.25 percent, or $876 thousand; while Fargo remained relatively flat, with a decrease of 0.4 percent or $2.4 million.
The biggest percentage fourth quarter decreases for the 50 largest cities were in Cando, down 40.5 percent; Kenmare, down 31.1 percent; Williston, down 22.6 percent; Walhalla, down 16.3 percent; and Tioga, down 15.2 percent.
Counties with the highest percentage increases were Oliver, up 45.7 percent; Bowman, up 26.4 percent; Pierce, up 25.8 percent; Renville, up 25.3 percent; and Grant, up 23.6 percent.
The counties with the biggest percentage decreases were Burke, down 65.2 percent; Dunn, down 44.3 percent; Towner, down 33.9 percent; Williams, down 21.5 percent; and McHenry, down 10.5 percent.