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Grand Island area economy rebounds in July

Grand Island area economy rebounds in July

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While the coronavirus pandemic is still a major concern among health officials in central Nebraska, the area economy saw major improvement in July after four months of turbulence.

The Nebraska Department of Revenue reported this week that net taxable sales were up slightly in July compared with the previous year. Net taxable sales in Grand Island in July totaled $91.387 million, compared with $91.11 million in July 2019. That’s an increase of 0.3%.

For Hall County, net taxable sales were $94.226 million, compared with $93.761 million in July 2019.

For Grand Island, it was the first month since February that net taxable sales have exceeded the previous year’s sales.

“Taxable sales for July 2020 are consistent with July 2019,” said Cindy Johnson, president of the Grand Island Area Chamber of Commerce. “Pent -up demand and our status as a regional hub likely contributed to this.”

She said it is important to note that many retailers began collecting the applicable sales tax on purchases delivered into Nebraska last year.

Taxable sales drop

as pandemic moves in

When the virus first began to affect Grand Island businesses in March, net taxable sales fell 12.8% that month from the previous year. The difference became greater in April as many people were laid off or furloughed or had reduced hours because the virus temporarily closed many businesses, such as restaurants, retail stores and motels. Grand Island’s net taxable sales in April were 22.1% less than April 2019.

The shock began to ease somewhat in May as businesses adjusted to the pandemic, government stimulus money began to kick in and people started going back to work. Net taxable sales in Grand Island were 17.8% lower than the previous May.

June saw conditions improving as net taxable sales in Grand Island were only 3.5% lower than the previous year.

As health restrictions continued to be eased with improvements in pandemic conditions, July was a good month for Grand Island and Hall County, as well as contiguous counties.

Howard County saw a 6.3% increase in net taxable sales in July compared with the previous year. Adams saw a 2.9% increase, while Buffalo County had a 9.6% increase. Merrick County had a 7.5% increase and Sherman County had a whopping 141.57% increase as net taxable sales climbed from $988,285 in July 2019 to $2.119 million in July 2020. Hamilton County saw a slight decline of 0.3% from the previous year.

Motor vehicle sales tax collections

July was also another record-setting month in Hall County.

The Nebraska Department of Revenue reported that Hall County collected $20.227 million in July, compared with $12.264 million the previous year. That is nearly a 65% increase.

It was the second straight month Hall County exceeded $20 million. In June, collections totaled $20.029 million, compared with $10.556 million the previous year. That was an increase of 89.7%.

Before the dramatic increases in June and July in Hall County, May was the complete opposite. Collections dropped 64.6% from the previous year. The April total was down 81.5% compared to last year. March collections in Hall County were down 7.7% from the previous year.

“Auto sales continued to be strong in July, defying what many would have expected,” Johnson said. “The year-over-year figures are impressive, especially for a high-ticket item such as a vehicle. Customer confidence and attractive pricing were evident.”

Collections in Adams County in July were up 90.6% from the previous year, and Buffalo County saw a nearly 60% increase.

UNL survey shows steady expectations

Last week, Bureau of Business Research at the University of Nebraska–Lincoln said its recent survey showed that business expectations remain steady in the state.

The report said Nebraska business confidence was mixed in September. The Business Confidence Index-Nebraska had a value of 91.5 in September, well below the neutral level of 100.

According to the report, that aggregate index value, however, reflects a significant difference between recent conditions and expectations about the next six months. The recent conditions sub-index, which reflects the change in sales and employment during recent months, was far below the neutral level, at a value of 78.2. The expectations sub-index, by contrast, was above the neutral level, at 104.8.

“Businesses planned a modest increase in employment over the next six months,” said Eric Thompson, an economist who serves as bureau director. “However, they were neutral regarding sales. The same number of businesses expected sales to decrease as expected sales to increase.”

Thompson said the coronavirus pandemic, customer demand and labor availability are the primary concerns for Nebraska businesses. The report said that 32% of business respondents mentioned the pandemic as their top concern. Another 24% focused on customer demand without specifically mentioning COVID-19, and 24% listed the quality and availability of labor as their top concern.

The full survey report is available on the Bureau of Business Research website www.bbr.unl.edu.

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