Quarterly Business Review
1st Quarter, 1999
OVERVIEW OF BUSINESS ACTIVITY
1st Quarter, 1999
(January, February, March 1999)
First Quarter, 1999 gross income was up 8.3 percent over 1st Quarter, 1998 and represented the strongest rate of growth since 4th Quarter, 1997. Manufacturing, contract construction, and retail trade were the sectors leading this growth.
Contract construction was up 9.6 percent overall with a 13.5 percent increase in general building construction and an 8.3 percent increase in special trade contractors. Heavy construction, including highways, was down 0.6 percent.
Manufacturing posted an 18.8 percent increase, largely on the basis of a 40.4 percent increase in the transportation equipment industry. However, a number of other industries in the manufacturing sector showed positive growth for the first time in many quarters. Industries that were notable for little growth, or outright declines in recent quarters, posted increases. These included food products, up 4.9 percent, lumber and wood products, up 11.3 percent, and paper and allied products, up 15.5 percent. Petroleum refining, after repeated quarterly declines, reported a 14.3 percent increase. Apparel and textiles was down 10.8 percent due to the sale of a clothing manufacturing facility.
The transportation and allied services sector was up 4 percent with the motor freight and warehousing industries up 3.6 percent. Water transportation (deep sea, and inland waters, including sightseeing) was up 18.6 percent. Air transportation was up 2.3 percent. Railroads and other transportation service both reported declines.
Communication and utilities was up 7.1 percent. Individually, communication was up 7.3 percent, and water companies 8.1 percent. Electric companies was up 15.4 percent. It should be noted that a major supplier of both electricity and natural gas distribution reports under the electric company SIC designation; thus, the substantial increase indicated for electric companies reflects both gas and electric sales activity.
Wholesale trade reported a 2.5 percent increase with durable goods up 6 percent. Nondurable goods reported a loss over the previous year of 1.8 percent, but this decline was considerably less than in recent past quarters. Wholesale paper and paper products continued its string of declines in recent quarters, dropping 25.3 percent, and farm products checked in with a whopping 76.5 percent decline. Declines on a year-to-year basis for farm products have been persistent since the meltdown of Asian economies. In spite of continuing declines in certain nondurable goods industries, this is the best performance of the wholesale trade sector since 4th Quarter, 1997.
Retail trade reported a 10.8 percent gain. All major industries within retail trade reported gains. Building materials, hardware was up 3.8 percent, and general merchandise, 5.7 percent. The largest increase was again in furniture, furnishings and equipment, up 21 percent. Automotive dealers and gas stations was up 14.9 percent. Strong consumer demand was evident with a 6.2 percent increase for eating and drinking establishments.
Finance, insurance and real estate was up 7.5 percent. Individually, financial services was up only 2 percent, but both insurance and real estate were up strongly, insurance reported a 13.6 percent increase and real estate 16.8 percent.
The services and other business sector was up only 1.1 percent; however, growth in this sector would have been much stronger but for a decline in computer services, down 30.7 percent. The decline in computer services was responsible for the overall 10.7 percent decline in total business services. Medical services, the second largest industry in the service sector, was up 8.5 percent, and other services (professional services) was up 11.4 percent.
Overall, 1st Quarter, 1999 had the strongest increase in quarterly gross income since 4th Quarter, 1997. Continued strong consumer demand at the retail level lifted retail gross income and provided some recovery of growth in the wholesale sector. Increases in a number of manufacturing industries, in addition to the transportation equipment industry, propelled the manufacturing sector to the leading growth sector during 1st Quarter, 1999.