Retail sales lead area's growth

The economy of Southeast Missouri grew at a steady if unspectacular pace during the first three months of 2007, according to the latest newsletter from the Center for Economic and Business Research at Southeast Missouri State University.

Retail sales led the growth, increasing 5.8 percent over the same period in 2006 throughout a 24-county region. That growth, along with an estimated 5 percent increase in personal income, shows business is expanding faster than inflation, said Bruce Domazlicky, director of the center.

The Summer 2007 Southeast Missouri Business Indicators report issued last week has detailed information about the region from Jefferson County in the north to the Arkansas border. It includes county-by-county breakdowns of total employment, unemployment rates, personal income and retails sales.

The report puts numbers behind the general impression that the region is buffered from the swings of the national economy. Some real estate brokers told me, when I wrote a story about reassessment, that home sales here are slower than they have been in past years. But in many parts of the nation, home sale prices are falling if the property can be sold at all.

"Nationally there is definitely a problem with an oversupply of homes," Domazlicky said. "In the Midwest, we did not have some of the overbuilding that they had on the coasts."

So while Southeast Missouri is subject to some of the same factors that caused growth of the national economy to slow in the first three months of the year, Domazlicky said, the impact is muted here.

"Some local economies are really hot, and when they slow down they slow down a lot," Domazlicky said. "We tend to plug along at a pretty good rate and generally don't have a really fast growing economy or a slow economy. That tends to mitigate some of the effects of the national economy.

"When the national economy slows, we slow a little," he said. "We are going to follow, but we are probably not going to see any big drops."

Among the findings in the report:

• Personal income in Cape Gir-ar-deau County rose 4.8 percent in 2006.
• Retail sales in Cape Gir-ar-deau County were 3.2 percent higher in the first quarter of 2007 compared to the first quarter of 2006.
• Total employment increased during the first three months of the year, but so did unemployment. In all, 37,985 people held jobs in Cape Girardeau County during the quarter, up 0.7 percent. The unemployment rate for the quarter was 4.3 percent, up from 3.7 percent in the final three months of 2006 but virtually unchanged from a year ago.

For Domazlicky, the number for total employment is as or more important than shifts in the unemployment rate to show the strength of the regional job market.

"It turns out there is a real strong seasonal factor," he said. "In the first quarter we generally see a drop, and in the second quarter, it picks up strong."

The same pattern continues with the fall a slow time for payroll growth and seasonal workers joining expanding payrolls in the last three months of the year, he said.

The full report is available at www6.semo.edu/cebr/newsletters/summer_2007.pdf.

• Business alliance: The Jackson Chamber of Commerce is seeking better relations with city officials so they will begin a regular program every other month for small business owners to meet with city leaders.

The "Small Business Alliance" will meet at 7 a.m. Tuesday in the chamber offices on Main Street, with the idea, chamber board member Marvin Wormington Sr. said, to resolve potential conflicts before they emerge. "It is going to be about what the city can do for business and what business can do for the city," Wormington said. Misunderstandings about the needs of each side can create those conflicts, Wormington said. "If we can eliminate this and get them on the same page, it will be better for everybody."

Tuesday's meeting will be an organizational meeting and include an informal round-table discussion of topics for future meetings.

• Yard sale sign-ups: The Scott City Chamber of Commerce wants to use a citywide yard sale to drum up business for the whole town. The event, which will take place on Labor Day weekend, Aug. 31 and Sept. 1, is being planned now. To have a sale listed in the event brochure planned by the chamber, contact Chaundra Mason at Paradise Flowers at 264-2117.
• Tax exemption seminar: The Missouri Chamber of Commerce and the Department of Revenue are working to explain a new sales-tax exemption to manufacturers, an effort that will include a meeting from noon to 1:30 p.m. Thursday on the Southeast Missouri State University campus at the School of Polytechnic Studies.

The new exemption for utility purchases, as well as the purchase of machinery, equipment and materials used for research and development, caused quite a local controversy this year. Cape Girardeau County officials worried about the potential lost revenue at one point even threatened a lawsuit over the legislature's power to take away local sources of revenue.

Several versions of the tax measure floated around the Missouri Legislature during the final weeks of the session, one that exempted the purchases from state and local taxes and one that only included state sales taxes in the exemption. Gov. Matt Blunt last week vetoed the large economic development bill that included a version that targeted both state and local taxes.

Cape Girardeau Presiding Commissioner Gerald Jones issued a statement praising Blunt for axing the bill, which could have cost the county $500,000 annually. "The county depends on sales-tax revenue to fund the services provided to residents," Jones said. "The reductions of more than a half-million dollars in sales-tax revenue resulting from these exemptions would have critically impaired our county's ability to function."

Now that the issue is settled, the chamber wants to make sure businesses take full advantage of the exemption.

"Now it is up to us to make sure every manufacturer is aware and has the tools needed to use the exemption to their advantage," said Daniel Mehan, president and CEO of the Missouri Chamber.

Rudi Keller is the business editor of the Southeast Missourian. Contact him at 335-6611, extension 126