All signs point to a local economic comebackPublished 11:59am Wednesday, March 7, 2012
While Austin historically has been insulated from economic downturns and recessions — with roughly 3,000 of the 21,359 labor force working at either the Hormel Foods Corp. Austin plant or Quality Pork Processors — there’s no question the 2008 recession took its toll locally, even as Hormel’s profits increased for the past three years. But Austin’s agricultural-based economy is showing signs of recovery, and Hormel’s and farmers’ good year in 2011 bodes well for the rest of us.
Perhaps one of the biggest indicators of a local turn-around is growth in the taxable retail sales numbers. In November 2011, local option sales tax receipts for Austin totaled $136,093 — meaning Austin businesses received $27.2 million in taxable retail sales that month — a 4.7 percent increase from November 2010, according to city of Austin financial director Tom Dankert. And while numbers aren’t finalized yet for December 2011, Austin Area Chamber of Commerce executive director Sandy Forstner said he has received a lot of positive feedback for the month, and expects an increase from December 2010. If that’s the case, Austin will most likely see growth in taxable retail sales for the third straight year.
“It seems like housing sales improved a little, and consumer confidence improved a little bit, and that gave us a little bit more traction and stability,” Forstner said. “I think our economy is picking back up.”
Austin’s taxable retail sales number actually increased in 2009 and 2010 — going from $245.1 million in 2008 to $279.5 million in 2009 and $296.4 million in 2010 — and it looks like 2011 will top 2010.
Another major factor in an economic recovery is the unemployment rate. In Minnesota, the unemployment rate dropped to 5.6 percent, and the state gained 15,500 jobs in January, according to the Minnesota Department of Economic Development. In Mower County — where the numbers have been better than the state average and well below the national average the past three years — the signs are even more promising, as December’s rate was 4.8 percent. The county’s numbers have been dropping, as the only three months under 5 percent unemployment since 2008 were the three most recent months with data available: October, November and December 2011.
The housing market also showed slight signs of improvement. Twenty-five houses sold in Austin during the month of January, an 8.7 percent increase from the 23 sold in January 2011, and the median sales price jumped from $78,000 to $82,750 over that same period, according to statistics released from the Southeast Minnesota Association of Realtors.
Austin’s printing press
Another factor, albeit small, in the local economic recovery can be traced back to a simple gesture made by Austin’s hospital. Mayo Clinic Health System in Austin switched its reward system for employees to Chamber bucks in the fall of 2010, and since then, Chamber bucks revenue has increased by more than six-fold.
At the time of the switch, Forstner said they were producing between $60,000 and $80,000 worth of Chamber bucks, but printed around $380,000 in 2010 and $422,000 in 2011, with roughly 80 percent of that coming from the hospital.
While not all Chamber members participate, it’s a little economic boost for those that do. Forstner said about 170 of the roughly 400 Chamber members (a number that’s also increasing) partake, meaning if it were split evenly, those 170 members would each get almost $2,500. That might not seem like a lot, but in terms of changing residents’ mindsets and emphasizing the Chamber’s motto to shop local, it provides another incentive to grow Mower.
Put all those together and it looks like Austin and Mower County may be heading for the proverbial light at the end of the tunnel.
Herald editor Adam Harringa’s column on business news appears every Wednesday.