Fourth Quarter, 1997 gross income was up 10.6 percent and bested the 9.6 percent increase in third quarter. Contract construction, manufacturing, and service sectors all reported double-digit gains, and the retail trade sector was close behind with a 9.8 percent increase.
Two business sectors, agriculture, forestry, and fishing, and mining and quarrying both reported declines; however, both of these sectors are not major gross income sectors as reflected in these data. Most agricultural activities are not subject to Washington State B&O taxes and thus gross income from such activity is not indicated in these data. Further, fishing activities, which reported a substantial decline in fourth quarter, primarily reflect fish caught outside state waters but landed in Washington. Together, both of these sectors constitute less than 1 percent of total gross income reported to the Department of Revenue.
Contract construction continued strong growth with a 15.3 percent increase from last year. General building contractors was up over 20 percent, heavy construction nearly 8 percent, and special trade contractors 13.1 percent.
Manufacturing was up 18.4 percent, substantially above the 12.8 percent increase in third quarter. Food products continued its general weakness with a 0.7 percent year-to-year decline, as well as lumber and wood products, down 3.4 percent. As has been the case in recent past quarters, the powerhouse of the manufacturing sector was once again the transportation equipment industry with a 45 percent increase. The transportation equipment industry accounted for over 90 percent of the year-to-year increase in the manufacturing sector. Exclusion of the transportation equipment industry increase from the data would have resulted in less than a 2 percent overall increase in manufacturing gross income.
Transportation and allied services was up 6.8 percent because of a 24 percent increase in motor freight and warehousing which offset declines in most other industries in this sector. Railroads, local and suburban transit, and water transportation all reported declines. The substantial decline in air transportation services was due to a SIC reclassification; without the SIC reclassification air transportation would be down 7 or 8 percent.
The communication and utilities sector was up 3 percent. Individually, communication (television, telephone, radio and cable services) was up 6.2 percent and water services 10.6 percent. The 16.5 percent increase for electric companies and the 65.9 percent decline for gas companies was due to reporting changes and industry reclassifications for a number of companies. Overall, the combined electric and gas company industries were up 2.6 percent.
Wholesale trade reported a 6.7 percent gain with durable goods contributing the major portion of this increase with a 9 percent year-to-year gain; nondurable goods was up 3.2 percent. Within durable goods, furniture and furnishings and sporting, recreational equipment were the biggest gainers. Motor vehicles and equipment was also strong with a 9.3 percent increase, as was machinery and equipment, up 10.1 percent. Paper products and farm product raw materials showed continued declines while apparel and piece goods was up 10.7 percent and groceries and related products was up 4.2 percent.
Fourth quarter retail trade was up 9.8 percent which put it ahead of third quarter's 7.9 percent increase. Retail building materials, hardware was up only 5.1 percent as some of the strong growth in this industry moderated in fourth quarter. General merchandise was up 5.6 percent and food stores had one of its strongest year-to-year gains in recent memory with a 9.9 percent increase. The largest gross income retail industry, automotive dealers and gas stations, had a 5.2 percent increase. The strongest retail growth was in apparel and accessories, 28.1 percent, furniture, furnishings and equipment, 17.6 percent, and miscellaneous retail stores with a 10.1 percent increase. Eating and drinking places was up an exceptional 8.8 percent, easily exceeding strong increases for this industry in the first three quarters of 1997.
Finance, insurance and real estate was up only 0.2 percent over last year due to weak year-to-year growth in finance, up 2.3 percent, and a substantial 61.9 percent decline in other finance. The decline in other finance was due to a large decrease in reported gross income for one firm. Other industries such as insurance and real estate did well with 15.3 percent and 13.2 percent increases respectively.
The service sector reported an increase of 14.7 percent, substantially above third quarter's 8.9 percent increase. Hotels, motels was up only 4.3 percent, but business services was up 23.7 percent with just under $6 billion in reported gross income for the quarter. Within business services, computer services was up 31.9 percent. The second largest service sector category, medical and health services, was up 10.9 percent. Automotive repair services was up 17.6 percent.
Gross income continued its near record growth during fourth quarter with the strongest gains in contract construction, manufacturing, and services. Retail trade had a nearly double-digit gain at 9.8 percent with the largest retail gains coming in apparel and eating and drinking establishments. Furniture, furnishings and equipment sales were also strong at both the wholesale and retail levels which complements the more than 20 percent gain in general building contractors gross income.