This week my favorite Jackson Hole economist, Jonathan Schechter, completes his three-part series on why the local economy has hit bottom with a look at taxable sales.
While not nearly as fascinating (to me at least) as his analysis of real estate sales and inches of classified ads in the local newspapers, this week’s article also is a must read. (Unfortunately the Jackson Hole News&Guide doesn’t seem to store back columns for its columnists, but here is a link to my post on the last one, which includes a link to the one on real estate.)
It’s key to read the entire article to fully grasp the context, but for me the most salient takeaways include:
- “The good news is that total taxable sales have held steady at around $920 million for the past three months, the first time this has happened since sales peaked in 2008. So, while taxable sales may not be growing, at least they seem to have stabilized, the necessary precursor to growth.”
- “Construction is a different story. A lagging indicator, taxable construction sales continued to grow through the middle of last summer, nearly a year after the rest of the economy started to tank. When it started to fall, though, construction spending went south in a hurry: 40 percent since its peak in January 2009, a compounded average of 3.5 percent per month. And given that building materials represent less than half of a given construction project, it’s hard to describe just how cataclysmic a change this is for the entire building trades industry.”
- “The good news is that if we ignore construction-related expenditures (which currently account for only 9 percent of the total), overall taxable sales have basically stabilized in the last several months. This is the same sort of thing we see with classified ads and real estate – while things may not be growing yet, at least they’ve stopped declining. This is great news, for it means that every piece of timely and meaningful data I’ve examined suggests our economic decline has stabilized.”
I’m looking forward to a promised article devoted entirely to the “building trades implosion” that continues to be a significant drag on the overall economy of Jackson Hole. I’ll keep you posted!