By Christopher Bjorke, The Bismarck Tribune, N.D.
Oct. 11--The economic gloom still hangs over the country, but North Dakotans have not put away their wallets yet.
"They're still going to movies, they're still going to restaurants, they're still buying RVs," said Kurt Lier, whose livelihood depends on people still doing the third activity. As sales manager for Capital RV in Bismarck, he said that customers' willingness to commit to big purchases like a $30,000 RV has not gone away, despite what they are seeing happening to the larger economy.
Taxable sales are holding steady according state data released recently by the state tax commissioner's office. Another indicator is the bottom line seen by dealers of cars and other large-ticket items, who have seen normal to above-average sales this year.
"We've had a very good year. We're not down in anything," said Eric Moritz, owner of Moritz Sport and Marine in Mandan. Buyers tend to be more cautious and to shop around for a deal during a recession, but have not been scared away by national unemployment rates near 10 percent or a local piece of bad news like the Bobcat plant closure.
"Our economy is more media-driven than dollar-driven," Lier said.
New cars sales are a good example. Nationally, car companies posted a 23 percent slide from a last year in September sales following a boost from the federal "cash for clunkers" incentive. Not so in Bismarck-Mandan.
"We actually sold two more vehicles than last September," said LaMonte Mikesh, general manager of Eide Ford Lincoln Mercury.
Justin Theel of Cedric Theel Toyota projected his sales to match 2008's after an up-and-down year, helped by a sales surge that coincided with the clunkers program in August and July -- "the best month in over 24 years in Bismarck." Too much success actually created its own problem when inventory became scarce.
"We're extremely fortunate to be in Bismarck, N.D.," Theel said, repeating a sentiment voiced by other area dealers.
Nationally, the latest retail numbers are still held down by the recession and growing unemployment. According to the National Retail Federation, sales, including cars, were down 5.9 percent in July compared to the same month in 2008. The latest taxable sales figures for North Dakota also are down from 2008, but show a growth trend from 2007. Because sales grew 21 percent in 2008, the numbers for this year were bound to be lower, and the more appropriate comparison is with 2007, according to Tax Commissioner Cory Fong. Compared to the same period in 2007, retail sales were up 8.2 percent or $83 million statewide.
The cash for clunkers program, which paid buyers an incentive to trade in older cars for more fuel efficient models, may have been a mixed blessing to car companies, which saw a boost in a sales while the program was running, but a drop-off in September. Local sellers said they mostly escaped the clunkers hangover.
Art Whittey, general manager of Corwin Churchill Motors, said he was skeptical about claims that the program pulled forward sales that would have been made at the end of the year to the summer. He thinks cash for clunkers encouraged customers who would otherwise not be buying a car this year.
"I don't know if they would really be in the market," Whittey said.
The local demand for larger, less fuel-efficient vehicles that were not eligible for the clunkers also has held up, dealers said. "Trucks and SUVs are almost impossible to find," Theel said.
Aside from cars, there are vehicles that are purely luxury items and purchases that are usually down when economic jitters are high: motor homes, boats, snowmobiles and other recreational items. Dealers said business was good, though some wondered if the national economy would cut into their sales.
Gary Van Beek of River City Sports said that a boat or a snowmobile was not something buyers were prepared to cut out of their budgets, even if they were minding their pocketbooks.
"I think people are working hard and finding money somewhere in their budgets to maintain their lifestyle," said Van Beek. One result of the recession he has seen is the shoppers have been looking for better deals and manufacturers are offering more incentives.
Moritz said that even in a bad economy "people still want to have fun."
"A lot of times, the toys are the last thing to go."
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