OVERVIEW OF BUSINESS ACTIVITY
                               4th Quarter, 1995
                      (October, November, December 1995)

Fourth Quarter, 1995 gross income declined 2.7 percent from Fourth Quarter,
1994.  The overriding reason for this decline was the Boeing strike and weaker
than expected Christmas retailing activity.  Although the strike was settled
just before Christmas, the combination of the strike and general consumer
constraint caused retailers to more heavily discount their goods early in the
season.  Thus, although the total volume of retail transactions may have been
comparable to the previous year, the actual dollar amount of sales was flat, or
down in some cases.

The fact that the strike was the primary contributor to the reduction in
overall gross income was evidenced by a decline of nearly 23 percent for the
manufacturing sector.  If the manufacturing sector was adjusted to zero out the
effects of the strike, statewide gross income for all industries would be up 4
to 5 percent from last year.

Some industries did well in spite of a weak fourth quarter.  Contract
construction was up 3 percent with general building contractors up 5.9 percent.
Within the manufacturing sector, food products was up 16.9 percent, paper and
allied products 14.7 percent, petroleum refining 13.5 percent, and electrical
machinery 19.2 percent.  Within the major service industries, transportation
was up 7.7 percent and communication and utility services was up 13.6 percent.

Wholesale trade reflected slower growth with an increase of 2.9 percent, the
relatively weak retail sector was up only 1.3 percent from last year.  Within
retail trade, building materials, hardware posted a decline of over 10 percent
in gross income, with food stores showing a decline of 0.5 percent.  Most other
retail sector activity showed nominal growth; eating and drinking
establishments was literally flat from the previous year.  The largest dollar
volume retail activity, auto dealers and gas stations, posted a 2.7 percent

Finance, insurance and real estate increased 7.3 percent with strong growth in
finance, up 10.9 percent, and insurance reporting an 18.5 percent increase.
Real estate and other finance reported declines of 7.6 percent and 11.5
percent, respectively.

The service and other business sector reported nominal overall growth of 1.7
percent.  Hotels/ motels was up 6.8 percent.  Within the business services
industry, advertising gross income was up 17.3 percent.  Overall business
services were up only 2.4 percent, a major component of the service sector,
automotive repair services, was down 7.7 percent.  Most other service sector
industries were a mixed bag with some up and some down.

Overall, much weaker growth than expected during fourth quarter due to the
strike and general retail consumer constraint.  Both wholesalers and retailers
had a rough fourth quarter.  The data indicates that First Quarter, 1996 may be
off to a slow start, but the conclusion of the Boeing strike may turn consumer
sentiments around and spur retail sector growth, which would improve the
potential for growth in other industries such as manufacturing and wholesale
trade.  However, continued poor retail sales growth could continue to dampen
First Quarter, 1996 expectations.

                          SPECIAL NOTICE TO QBR USERS
            Changes to the Composition of Gross Income for Table 1

Effective with the Quarter 1, 1995 edition of this publication, Table 1,
“Total Gross Business Income,” has been adjusted to eliminate double
counting of gross business income and more accurately reflect the true
level of gross income activity.  Therefore, gross income data shown in
Table 1 of this report will not be directly comparable to gross income in
Table 1 for earlier publications of the QBR.  (The Quarter 4, 1994 data in
Table 1 of this edition has been adjusted so that the year-to-year change
is accurate.)

In recent years, a number of new tax lines were added to the excise tax
return for special purpose taxes, including, but not limited to: solid
waste tax, refuse collection tax, petroleum tax, and hazardous substance
tax.  In most instances, these taxes resulted in double counting of gross
income data from businesses reporting on these new tax lines.  During the
period June 1986 through July 1989, six new tax lines were added that
resulted in double counting of some business income.

Additionally, Table 1 has always included use tax in gross income data
which resulted in double counting when such purchases were subject to both
Business and Occupation (B&O) tax and use tax (use tax is an in-lieu sales
tax when sales tax was not collected on the original sale).  In order to
eliminate such instances of double counting, all use tax data has now been
eliminated from gross business income shown in Table 1.

Because of the changes made to gross income data published for 1995, we will
republish Table 1 on a calendar year basis for the years 1988-1994 when Table 1
for calendar year 1995 is published.  Table 1 for those earlier years will be
available on a request basis.  Years prior to 1988 are not directly comparable
to later years due to the 1987 SIC code revisions.  However, most of the new
tax lines that caused the double counting problem were not in existence in 1987
and earlier years; thus year-to-year comparisons for years prior to 1988 can be
made to later years using the new tax base if SIC revisions do not skew the SIC
category in question.

For analytical purposes, gross business income shown in Table 1 is now
comprised of the retail sales tax line, all public utility tax lines and all
B&O tax lines except retailing.