OVERVIEW OF BUSINESS ACTIVITY
1st Quarter, 1997 (January, February, March 1997)
First Quarter, 1997 gross income posted an increase of 10.9 percent over 1st Quarter, 1996 for the largest year-to-year gain in some time. First Quarter, 1997 increases were largely the result of strong growth in the manufacturing and contract construction sectors. Wholesale trade also did well with a 9.5 percent increase.
Contract construction was up 13 percent with heavy construction reporting a 31.2 percent increase. Heavy construction includes highway construction activities. Also reporting double-digit gains were general building contractors, up 11.4 percent, and special trade contractors, up 10.5 percent.
Manufacturing gross income was up sharply with a 23 percent increase. Manufacturing increases were widespread among most manufacturing industries, but the major factor, which accounted for the majority of the year-to-year gain in manufacturing, was the 61 percent increase in transportation equipment The transportation equipment increase this year was in marked contrast to a 5.4 percent decline reported in 1st Quarter, 1996. Lumber and wood products, another significant manufacturing industry which reported a decline last year (-5.4 percent), reversed that with a 5.3 percent gain this year.
Transportation and allied services reported a 6.9 percent increase. Within this sector, railroads were up 58.4 percent; however, the major industry within this sector, motor freight and warehousing, reported virtually no year-to- year change. Part of this flat year-to-year change for motor transportation may be due to reporting changes by some companies within this industry.
Communication and utilities was up 6 percent with an 8.7 percent increase in communication providing the major part of that increase. Gas companies reported a 12 percent decline.
Wholesale trade posted a 9.5 percent gain this quarter due entirely to a 17.5 percent increase in durable goods. Nondurable goods were up less than 1 percent. Within durable goods, most of the major industries reported double- digit gains; these industries included motor vehicles, furniture, lumber, sporting/recreational equipment, machinery, and miscellaneous durable goods manufacturers. Nondurable goods showed little year-to-year growth except in apparel, piece goods and notions, up 13.9 percent.
Retail trade was up 7.5 percent with the largest retail industry, automotive dealers and gas stations, up 6.4 percent. Building materials hardware continued strong growth with an 8.4 percent increase. General merchandise stores reported a 6.3 percent increase. The category eating and drinking establishments was up 6 percent. The strongest growth was in miscellaneous retail stores, up 17.8 percent.
The finance, insurance and real estate sector was up only 4 percent. Insurance, real estate, and other financial services were all up strongly, but these increases were offset by a 4.6 percent decline in financial services.
The services and other business sector posted a 7.4 percent increase. Although the largest service sector industry, business services, reported only a 5.8 percent increase, all sector industries reported increases except motion picture theaters and productions which was down 7.6 percent. Miscellaneous other services was also down, but this category reflects reporting for various unclassified activities.
First Quarter, 1997s 10.9 percent increase represented the strongest year-to-year gain in gross income since 3rd Quarter, 1995 (10.8 percent) and indicated strong growth in major economic sectors such as construction, manufacturing, and wholesale durable goods. Significant strength was also seen in the retail trade sector with a 7.5 percent increase and business services continued its steady growth with a 7.4 percent increase.