Posted 7/07/15 (Tue)
By Journal and Tribune Staff
The latest taxable sales and purchases stats aren’t as bad as they might have been -- in fact, they make statistics from 10 years ago look dreadful.
State Tax Commissioner Ryan Rauschenberger put out first quarter 2015 stats last week, showing a slight increase over the first quarter of 2014.
Area businesses, however, actually noticed declines.
“Really, for us, that slowdown began at the end of 2013. We saw things quiet down as construction had begun to see completion,” said Kay Garbel, Garbel’s Furniture & Flooring, Crosby.
“With the price of oil dropping, it’s been a slow decline. The first part of the year was the quietest we’ve seen since we opened,” said Becki Schumacher, manager of the Guardian Inn, Crosby.
For much of the state, however, the impact was negligible, at least through the end of March.
“With declining oil prices in the first quarter of this year, we expected to see negative economic impact including a decrease in North Dakota’s taxable sales and purchases,” stated Rauschenberger. “An increase of 2.26 percent is a good sign.”
The news was not so good for towns like Tioga, Wildrose, Lignite and Noonan -- all of which saw declines above 25 percent.
Other area towns, like Crosby, Bowbells and Powers Lake saw declines under 10 percent.
Williams Co. hit harder
Companies directly linked to the oil and gas boom and it’s subsequent slowdown have seen the impact on their sales.
James Radke, CFO of Horizon Resources, tracks sales quantities instead of dollars. He said sales quantities at the Ray Cenex are down about 8 percent since last year. The Wildrose Cenex, which is further off the beaten path, is down 40 percent.
Despite the downswing in sales, as well a cheaper prices at the pump, the company’s base in agriculture has largely supported its struggling energy division.
“We have a lot more diversity so we’re able to weather the storm a little better,” said Radke.
Wesley Johnson, president of Tioga Machine Shop, estimated his business has dropped close to 50 percent compared to last year.
“Our work really went down the toilet,” he said. “It’s slowed way, way down.”
While Johnson has managed to hold on to all of his employees, many are helping the company float through the slow period by taking vacation days and unpaid time off.
Johnson doesn’t expect business to improve until after the new year.
“We’re just kind of holding our own and seeing what’s going to happen.”
For Garbel, the slowdown isn’t all bad.
“We never expected we’d sustain the level of 2011, 2012 and 2013, so it wasn’t a real shock to our system. It’s nice to be able to provide better service as far as faster installation -- people are taken care of sooner than they were at the height of our busy period,” she said.
Regardless of how acutely -- or not -- any single business is suffering from the present downturn, the area’s economy continues to operate at a level many times ahead of where it was five years ago and light years beyond where it was 10 years ago.
“Sales are still at a higher level than they were prior to 2011, so we have every reason to be positive. We expect to finish 2015 at least at par, or above a little,” said Garbel.
A review of first quater statistics back to 2006, show first quarter 2013 as the high water mark for taxable sales and purchases in Crosby, while Tioga enjoyed a two-year peak from 2012-13.
Crosby’s current first quarter taxable sales and purchases of $5.4 million are only a little more than $1 million off the 2013 high of $6.5 million -- but it’s still $2.3 million higher than first quarter 2011.
Likewise, Tioga’s first quarter 2014 stat, at $166 million, may be $70 million less than the highs seen in first quarter 2012 and 2013, but it’s $64 million more than was recorded in first quarter 2011.
Statistics for the pre-boom year of 2006, however, show just how much the area has changed in 10 years.
Crosby recorded just $1.3 million in taxable sales and purchases in the first quarter that year, while Tioga recorded just $7 million.
That means, whatever the declines this quarter, Crosby’s first quarter taxable sales and purchases are four times greater today, while Tioga’s have increased 23-fold.
Schumacher expects things will pick up as the year progresses. With the oil price now trending upward and seasonal events like the Threshing Bee bringing people to town, the motel is experiencing a steady incline of business.
“We’re getting calls on pending projects possibly in the near future. Companies say, ‘We eventually will be coming back. We’re just gone for a while,’” said Schumacher.