Indicators point to improving economy in Cape area in 2012

Slowly but surely, the Cape Girardeau area's economy is improving.

Key economic indicators, including increasing sales tax revenue, continued construction growth and lower unemployment rates, all point to a stronger economy in 2012.

"My impression is that Cape Girardeau County showed steady economic improvement in 2011, better than what was experienced nationally," said Bruce Domazlicky, director of the Center for Economic and Business Research at Southeast Missouri State University.

John Mehner, president and CEO of the Cape Girardeau Area Chamber of Commerce, agrees.

"What everybody is looking for is any kind of a sign that we've turned a corner, that we're not necessarily treading water anymore, that we might be actually getting better," Mehner said. "In that vein, there are some positive signs."

Sales tax

One of the clearest indicators Cape Girardeau County is rebounding from the recession is its sales tax collections. The county's general sales tax collections increased 4.08 percent from 2010 to 2011. This is the second straight year of sales tax growth, following two years of declining revenue in 2008 and 2009. During calendar year 2011, the county collected $6.49 million in general sales taxes, compared to 2007's prerecession total of $6.36 million.

"In 2010 and 2011 we started to come back up. Not at the rate that we wish, but that is one indicator that things are getting a little bit better," Mehner said.

Retail sales in the third quarter of 2011, the most recent quarter available, were up by 3.6 percent over the third quarter of 2010, according to Domazlicky's most recent Southeast Missouri Business Indicators report.

"It has been some time since the region has seen such steady growth in retail sales," he said.

In 2012, he expects retail sales to continue to increase in the 4 to 5 percent range.

General sales tax collections increased in Cape Girardeau and Jackson during 2011. Cape Girardeau saw a 4.8 percent increase in general sales tax for a total of $9.19 million, while Jackson's general sales tax collections increased just slightly at 0.47 percent for a total of $2.05 million.

Mehner said it's important to note that the sales tax totals do not include taxes on purchases local residents make on the Internet.

"I have no idea where we would really be if Internet sales tax was a part of that situation," Mehner said.

People may be spending more in part because they have more in their wallets. Personal income in Cape Girardeau County went from $2.58 billion in the second quarter of 2010 to $2.71 billion in the second quarter of 2011, according to the Southeast Missouri Business Indicators report. Third-quarter figures for 2011 weren't yet available. The income growth from the second quarter of 2010 to the second quarter of 2011 translates to a per-capita increase of $1,666.

Unemployment rates

Cape Girardeau County's unemployment rate fell more than 1 percentage point from July through November last year. The rate in November was 6.1 percent. December numbers for local areas haven't been released yet; however, the national unemployment rate last month was 8.5 percent.

"It definitely has been declining," said June O'Dell, president/COO of the Southeast Missouri Workforce Investment Board. "We are seeing more opportunities. There are more jobs here and there. We're seeing more of this company may need two, that company may need five, than we are any huge hirings."

But Mehner points out that 2012 will bring the opening of two new businesses seeking to hire hundreds of workers, including Menards home improvement center, scheduled to open this spring, and the Isle of Capri casino, slated to open later in the year.

In addition, NARS and Nordenia USA have also announced plans to add workers in 2012.

"We're trying to gear up for that and be ready," said O'Dell, whose organization oversees the Missouri Career Centers in 13 Southeast Missouri counties. "There are on-the-job-training dollars there for companies who hire people who have lost their jobs and are beginning to see their unemployment run out."

Cape Girardeau County's average unemployment rate in 2011 was 7.2 percent, compared to 8 percent in 2010. That rate will likely be closer to 6 percent by the end of 2012, Domazlicky said.

Construction growth

Building permits for new homes increased in Cape Girardeau but declined in Jackson. However, commercial construction in both communities grew in 2011.

There were 19 more new building permits issued in Cape Girardeau for single-family homes in 2011 than the previous year for a total of 49 houses. In Jackson, construction began on 38 new single-family homes, a decrease of 12 homes.

Brandon Williams, of Brandon O. Williams Construction LLC, said his business saw a decline in 2011 due in part to uncertainty people have about the economy and banks adopting stricter credit requirements for home loans.

But Williams saw business begin to turn around in November.

"We're seeing a lot more activity in the last 60 days than we had the previous 120 days before that," he said. "We've already booked some sales in 2012."

New commercial construction projects in Cape Girardeau and Jackson totaled more than $24.1 million in 2011, up from just $6.4 million the previous year. Hospital additions, public school and university renovations, and businesses including Menards, Isle of Capri and Nordenia all contributed to the commercial construction growth in 2011, Mehner said.

"I think we have maintained ourselves from a building standpoint," Mehner said. "When you have commercial growth, then eventually you will have the residential behind it, but there may be a little lag there."

miller@semissourian.com

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