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600 E. Boulevard Ave.
  Bismarck, ND 58505-0599
  701.328.7088 phone
  701.328.3700 fax
  877.328.7088 toll-free

Contact: Rick Clayburgh, 701-328-2770 

July 2, 2001

Kathryn Strombeck, Research Analyst,             701-328-3402

First Quarter Taxable Sales and Purchases Are Mixed: Oil and Gas Activity Remains Strong

BISMARCK ---Tax Commissioner Rick Clayburgh released a key economic report for the first quarter of 2001 today.  The taxable sales and purchases report shows first quarter consumer spending remained modest with total taxable sales and purchases of $1.529 billion, up by almost $73 million over the first quarter 2000, for a five percent increase.

“While the rest of the nation experienced a slowing economy, the numbers released today show stable to modest growth and point to the benefit of North Dakota’s diversity,” said Commissioner Clayburgh.

Spurred by higher prices and increased oil demand, activity in oil and gas drilling remained strong.  The mining and oil extraction sector increased over 49 percent compared to first quarter 2000 with taxable sales and purchases over $9.6 million.

The transportation, communication, and public utilities sector experienced significant growth, reporting a 50.3 percent increase in taxable sales over the same time frame a year ago.

“Cell phone and cable services sales helped stimulate this sector,” said Clayburgh.  “And increased prices in natural gas and higher heating costs contributed to the growth as well.”

Wholesale trade continued to show strength, increasing 7.4 percent, and the services industry rose 1.5 percent. Clayburgh said he was particularly pleased by the growth in wholesale trade because it included 16.9 percent growth in farm machinery and farm repair parts.  Clayburgh noted the 1999 Legislative cut to the sales tax rate on farm repair parts and used farm machinery may have contributed to the increased sales. 

Retail trade remained stable, reporting minimal growth of .2 percent.

“Typically, first quarter retail sales are flat,” said Clayburgh, “and the prolonged cold weather this winter most likely added to the lackluster sales due, in part, to consumer concerns over higher heating bills.”

The construction sector reported a drop of 48.8 percent, while manufacturing activity waned, lagging by 1.5 percent compared to the first quarter of 2000.  Clayburgh attributed the decrease in the construction sector to the completion of large, one-time-only projects. 

Of the 50 largest cities, the biggest percentage increases in the first quarter of 2001 were in the double-digits with Langdon, up 21 percent; Williston up 19.9 percent; Garrison, up 18.8 percent; Hillsboro, up 17.4 percent; and Lisbon, up 16.5 percent.

The biggest percentage first quarter decreases for the 50 largest cities, were in Cavalier, down 20.3 percent; Cando, down 18 percent; Cooperstown, down 13.2 percent; New Town, down 11.7 percent; and Harvey down 10.3 percent.

Counties experiencing the highest percentage first quarter increases were Dunn, up 32.1 percent; Grant, up 21.9 percent; LaMoure, up 19.4 percent; Williams, up 18.2 percent; and McHenry, up 18.2 percent.

The counties with the biggest percentage of decrease were Billings, down 33.8 percent; Oliver, down 30.8 percent; Sargent, down 26.2 percent; Sheridan, down 16.8 percent; and Towner down 13.4 percent.

Complete North Dakota Sales and Use Tax Statistical Reports from First Quarter 2001 can be accessed on the web at: www.nd.gov../forms/sales.html

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