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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
FOR IMMEDIATE RELEASE Contact: Cory Fong, Tax Commissioner, 701-328-2770
Monday, July 10, 2006 Kathryn Strombeck, Research Analyst, 701-328-3402 

FIRST QUARTER 2006 SHOWED STRONG ECONOMIC ACTIVITY

BISMARCK, N.D. – Tax Commissioner Cory Fong released figures today showing that 2006 got off to a great start with very strong economic activity. Today’s report shows North Dakota’s total taxable sales and purchases during January, February, and March of 2006 were just over $2 billion, an increase of 12.5 percent compared to the first quarter of 2005.

“This is a very strong report,” said Fong, “and it marks the first time that North Dakota’s First Quarter taxable sales and purchases exceeded two billion dollars.”

Thirteen of the fifteen major sectors reported gains when compared to the same time one year ago. Retail trade grew by 7.4 percent, representing an increase of $55 million; while the professional, scientific, technical and management services sector had the largest percentage of growth, rising by 84.9 percent when compared to the first quarter of 2005.

“Even with high gas prices at the pump and rising interest rates,” Fong said, “consumer spending remained strong.”

Other sectors showing gains include: the mining and oil extraction sector was up by 63.6 percent; transportation and warehousing, grew by 28.3 percent; construction, increased by 23.9 percent; wholesale trade, grew by 23.5 percent; utilities, up by 20.4 percent; information industries, increased by 10.4 percent; educational, health care, and social services grew by 8.6 percent; accommodation and food services was up by 7.6 percent; other services increased by 5.8 percent; and manufacturing grew by 2.6 percent.

“Even though we anticipated the strong economic momentum of 2005 to continue into this year, we are pleasantly surprised at this robust level,” said Fong. “This report is very good news for North Dakota.”

However, Fong warned that with severe drought conditions impacting producers across the state, a possible downturn in the agriculture sector may begin to show up in the second and third quarters.

“The current conditions for our farmers and ranchers across the state will certainly impact their buying habits,” said Fong. “And, because agriculture is our state’s largest industry, a downturn for our producers may have an effect on the other core sectors of our economy, depending upon the widespread severity and length of the drought.”

Despite these concerns, Fong is still cautiously optimistic about the state’s economy heading into the peak summer season with the trends showing continued growth across most major industry sectors.

Fong added that it will be important to watch the travel and tourism industry as well, especially for third quarter. “Tourism is now our state’s second largest industry. If the travel season is as good as tourism officials are reporting for 2006, we will likely see a strong showing in the accommodation and food services sector that measures that industry. This too will help boost consumer spending in other categories as well,” said Fong.

Two sectors showed a decline. The arts, entertainment and recreation sector dropped by six percent; and the financial, insurance, real estate, rental and leasing sector declined by 1.5 percent.

Of the 50 largest cities, the biggest percentage increases for the first quarter of 2006 were Tioga, up 62.7 percent; Williston, up 40.8 percent; Park River, up 33.3 percent; Garrison, up 24.9 percent; and Washburn, up 22.5 percent.

The biggest percentage first quarter decreases for the 50 largest cities, were in Cando, down 26.6 percent; Northwood, down 16.6 percent; Cavalier, down 15.1 percent; Carrington, down 13.5 percent; and Ashley, down 11.1 percent.

Counties with the highest percentage increases were Renville, up 50.5 percent; Williams, up 42.1 percent; LaMoure, up 36.9 percent; Sioux, up 29.6 percent; and Burke, up 22.6 percent.

The counties with the biggest percentage decreases were Towner, down 25.2 percent; Sargent, down 18.9 percent; Pembina, down 13.6 percent; Foster, down 13.4 percent; and Steele, down 12.3 percent.

The complete North Dakota Sales and Use Tax Statistical Report for First Quarter 2006 is available on the Tax Department’s web site at: www.nd.gov/tax

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