OVERVIEW OF BUSINESS ACTIVITY 4th Quarter, 1996 (October, November, December 1996)
Gross income during Fourth Quarter, 1996 was up 9.9 percent from the same period last year. This was more than double the 4.8 percent increase in Third Quarter, 1996 and the largest gain since Third Quarter, 1995. Manufacturing was the engine behind this growth with a 23.2 percent increase. Retail trade was up 6.8 percent, the same gain as was posted in the third quarter. The manufacturing sector nearly doubled its third quarter gain of 12.3 percent with a 23.2 percent increase this quarter. Of course, the transportation equipment sector was the primary growth factor here with a soaring 70.1 percent increase (part of this increase was due to the Boeing strike during Fourth Quarter, 1995). The two other major segments of the manufacturing sector, food products (up 2 percent) and lumber and wood products (down 4.6 percent) were neutral factors. Other notable increases were in apparel and textiles, up 21 percent, chemicals and allied products, 15.9 percent, and machinery (except electric), up 20 percent. Continued weakness was evident in some food product categories such as meat products, down 7 percent, and grain mill products, down 20.2 percent. The substantial increases in two areas, petroleum refining and fabricated metal products (cans) were due to registration changes and reassignment of SIC codes. Contract construction continued to rebound with an overall gain of 10.7 percent. General building construction was up 8.8 percent, heavy construction (including highways), up 14.5 percent, and special trade contractors, 11.3 percent. Miscellaneous other trade contractors was up 16.8 percent. Transportation and allied services reported a slight drop in gross income for fourth quarter with a 2.7 percent decline; however, part of the reason for this decline was due to an adjustment of the data due to reporting anomalies in the motor freight and warehousing industry. Growth was evident in most of the transportation industries with strong increases in local and suburban transit, up 19.1 percent, water transportation, up 23.7 percent, and air transportation services, 24.2 percent. Railroad transportation was up 5.1 percent. Communication and utilities reported stronger growth than last quarter with a 6.3 percent gain. Communication activities reported an 8.9 percent increase, gas companies were up 24.2 percent, and water companies, 7 percent. Wholesale trade posted a 9.9 percent gain, a good showing compared to the 4 percent increase in third quarter. Wholesale durable goods was the main factor here with a 15.6 percent increase. Durable goods had strong growth in most major industries--the largest increase, 23.8 percent, was in sporting, recreational equipment. Nondurable goods was up only 3.8 percent, largely due to decreases in paper and paper products, down 15.7 percent, and farm product raw materials, down 17.9 percent. Within the nondurable goods sector, the strongest industries were apparel, piece goods and notions, up 15 percent, and groceries and related products, up 11.4 percent. Retail trade replicated its third quarter performance with a 6.8 percent increase. General merchandise was up 7.5 percent, and building materials, hardware 9.2 percent. The rest of the retail sector was something of a mixed bag with nominal growth in auto dealers (3.1 percent), apparel and accessories up 1 percent, and eating and drinking establishments 1.6 percent. Furniture, furnishings and equipment was up 8.7 percent largely as a result of a 15.1 percent increase in electronics/music stores. Remember the Christmas week snowstorms--fuel and ice retailers were up 23.5 percent. Finance, insurance and real estate was up 4.5 percent with small gains in both finance and insurance, and real estate and other financial services both reported double-digit growth. Services and other business was up only 3.4 percent with the largest industry in this sector, business services, reporting a 1.9 percent decline; however, within the business services industry, advertising gross income was up 15.9 percent. Automotive repair services was up 6.6 percent, and other services (professional services) was up 11.4 percent. Fourth quarter gross income growth seemed to be back on track after slow growth through late 1995 and early 1996. Retail trade maintained its third quarter gains, while wholesale durable goods growth was quite strong. Wholesale nondurable goods income gains were low due to continued weak paper and farm product prices. Manufacturing gross income was the main factor in fourth quarter growth, but the secondary effects of manufacturing income growth are beginning to show up in other parts of the state economy.