Monday Report
2008 Construction and Public Policy Initiatives January 19th 2009


Public Policy Initiatives

Retail Sales to Rebound in Second Half '09: ICSC


  • Treasury Budget
  • The unified budget deficit for December was $84 billion, close to the CBO's estimate of $83 billion. Through the first three months of fiscal 2009 the budget deficit was $485 billion, 350% larger than at the same point in fiscal 2008. Purchases of stock in banks as part of the TARP program have greatly added to the deficit this fiscal year.
  • International Trade (FT900)
  • The U.S. trade deficit substantially narrowed to $40.4 billion in November. The consensus had expected a much smaller narrowing to $51.5 billion. This marks the fourth straight month of declining gross exports and gross imports.
  • Producer Price Index
  • Producer prices for finished goods gave up ground for the fifth month in a row in December, falling by 1.9% in response to weakening demand. The decline in top-line producer prices continues to be largely driven by falling prices for energy products, which dropped by 9.3% on the month. When food and energy prices are excluded, core inflation remained positive at 0.2%. Although core prices for finished goods have not begun to fall, core prices among intermediate and crude products both fell sharply for the third month in a row.
  • Import and Export Prices
  • Import prices declined 4.2% in December because of a sharp drop in petroleum prices. The smaller than expected decline follows a downwardly revised 7% drop in November (previously -6.7%). Import prices have declined for five consecutive months as both the U.S. and global recessions intensified in the fourth quarter. With import prices falling, the Federal Open Market Committee will leave its target rate near historic lows for most of this year.
  • Business Inventories (MTIS)
  • Total business inventories declined 0.7% in November, undershooting expectations for a milder decline. Retail inventories were the only new data in this report, falling 1.7%. However, dismal sales continue to contribute to gains in the inventory-to- sales ratio, which increased to 1.41, a multiyear high.
  • Job Openings and Labor Turnover Survey
  • JOLTS data confirm the bleak labor market situation. In November, gross hiring fell sharply, to 3.5 million from 4.2 million in October. The number of job openings dropped as well, from 3 million to 2.8 million. However, separations remained virtually unchanged-4.3 million workers left their jobs for various reasons. The hire rate fell to 2.6%, compared with 3.4% in November 2007, while the separation rate at 3.2% was actually lower than a year ago (3.4%).
  • Employment Situation
  • As expected, 2008 ended on a bleak note for the labor market. Payroll employment declined by 524,000 jobs in December, slightly more than expected. Losses for November and October were much greater than the preliminary data had indicated as well; an additional 154,000 jobs were subtracted from the total in those months. As a result, 1.5 million jobs were lost on net during the fourth quarter. Over the course of 2008, payrolls shrank by 2.59 million jobs. Meanwhile, the unemployment rate, calculated from the household survey, rose to 7.2%, while the rates for the prior two months were revised higher-to 6.8% for November and 6.6% for October. The revision to previous months was due to new seasonal factors. U.S. unemployment last topped 7% in the early 1990s.
  • Jobless Claims
  • Initial jobless claims increased by 54,000 to 524,000 for the week ending January 10. This was more claims than expected, though still considerably less than December's high. Generally, it is difficult to infer the state of the labor market from claims readings around the holiday season. It will likely be several more weeks before claims are consistent with other labor market indicators. Overall, labor market trends have been pointing to persistent weakening.
  • MBA Mortgage Applications Survey
  • In the week ending January 9, the MBA indices showed mixed results. The composite market index increased 15.8% to 1,324.8. This was driven by an increase in the refinance index, which rose 25.6% this week to close at 7,414.1. In contrast, the purchase index fell 14.1% to 295.8, despite a decline in contract rates.
  • Retail Sales (MARTS)
  • Total retail sales continued to plunge in December, down 2.7% in total and 3.1% excluding autos, far worse than expected. Further, November declines were revised down. Total sales fell 2.1% (originally down 1.8%), and sales excluding autos fell 2.5% (originally down 1.6%). Declines in December were widespread, although they were led by gas stations. Building supply stores, clothing stores, department stores, and restaurants also saw sales plunge as consumers cut spending aggressively. Core sales fell 1.5% and were revised from a gain of 0.3% to a decline of 0.2% in November.
  • Chain Store Sales
  • Chain store sales tumbled 2.3% in the week ending January 10, more than reversing the prior week's gain as consumers remain very hesitant to spend. The year-ago decline expanded to 2.2%, the largest decline in decades. The ICSC noted fewer gift card redemptions and unfavorable weather as drags in the week.
  • Oil and Gas Inventories
  • Crude oil inventories increased by 1.2 million barrels during the week ending January 9, according to the Energy Information Administration, below expectations of a 2.2 million barrel build. Distillate inventories surged by 6.4 million barrels, dwarfing expectations of a 1.1 million barrel increase. Gasoline inventories rose by 2.1 million barrels, also surpassing expectations. Refinery operating capacity rose from 84.6% to 85.2%. Total domestic petroleum demand fell appreciably. This report points to lower oil prices.
  • Weekly Natural Gas Storage Report
  • Working gas in underground storage decreased by 94 billion cubic feet during the week ending January 9. The consensus estimate was for a decline of 106 billion cubic feet.


  • Alta Mere, Milex and Mr. Transmission
  • Moran Industries, Inc. trades as Alta Mere, Milex and Mr. Transmission at 190 locations nationwide.
  • The centers, offering automotive repair, services and accessories, occupy spaces of 2,500 sq.ft. to 5,000 sq.ft. in freestanding locations and strip centers.
  • Plans call for six openings throughout the existing market during the coming 18 months.
  • Typical leases run five years with three, five-year options.
  • Specific improvements are required.
  • Preferred demographics include a population of 100,000 within three miles earning $50,000 as the average household income.
  • Major competitors include Aamco, Meineke, Midas and All Tune & Lube.
  • A land area of 0.5 acres is required for freestanding locations.
  • For more information, contact
    • Jack Yost,
    • Moran Industries, Inc.,
    • 4444 West 147th Street,
    • Midlothian, IL 60445;
    • Web site:
  • Dutch Bros. Coffee
  • Dutch Bros. Coffee operates 138 locations throughout AZ, CA, CO, ID, OR and WA.
  • The drive- thru coffee shops occupy spaces of 377 sq.ft. in freestanding locations and pad sites.
  • Growth opportunities are sought throughout the existing markets during the coming 18 months.
  • Typical leases run 10 years.
  • Specific improvements are required.
  • Preferred demographics include a population of 50,000 within five miles earning $50,000 as the average household income.
  • Major competitors include Starbucks.
  • The company is franchising.
  • A land area of 10,000 sq.ft. is required.
  • The company will also consider locating in second generation sites.
  • For more information, contact
    • Brian Maxwell,
    • Dutch Bros. Coffee,
    • PO Box 1929,
    • Grants Pass, OR, 97528;
    • Web site:


  • Retail Sales to Rebound in Second Half '09
  • Public Policy Initiatives
  • Utah Construction - 2008
  • Economic Notes
  • This Weeks Leads

  • UTAH CONSTRUCTION - January - December 2008

    CountyTotal Value Construction ($000)% Change 2007-08
    Beaver County33,344.70110.5
    Garfield County26,946.0034.7
    Daggett County1,765.106.1
    Uintah County214,914.004.4
    Piute County00.0
    Wayne County8,731.50-0.8
    Duchesne County43,742.00- 10.0
    Rich County12,460.00- 10.7
    Millard County10,780.40- 15.0
    Grand County27,029.60-15.5v
    Weber County274,321.30- 16.1
    Carbon County22,961.20- 18.9
    San Juan County9,933.60- 25.7
    Emery County8,717.50- 26.2
    Sanpete County32,476.20- 28.4
    Salt Lake County1,439,624.20- 33.2
    Davis County346,529.40- 39.4
    State Total4,199,777.50- 40.0
    Wasatch County101,752.10- 40.9
    Sevier County29,503.50- 44.0
    Cache County132,837.40- 44.5
    Tooele County94,592.10- 45.6
    Box Elder County81,008.30- 49.3
    Washington County261,052.20- 50.8
    Utah County735,262.60- 51.0
    Morgan County15,655.00- 53.0
    Juab County6,738.20- 59.9
    Summit County154,860.30- 61.1
    Iron County56,952.10- 61.4
    Kane County15,287.00- 74.7

    Source: University of Utah BEBR, January 2009

  • Public Policy Initiatives
  • Montana Passes Healthy Montana Kids Plan Act
  • In November, Montana residents overwhelmingly passed Initiative 155, which establishes the Healthy Montana Kids plan to expand and coordinate coverage for uninsured children under Medicaid and SCHIP. The plan calls for: 1) raising income eligibility levels for children under SCHIP and Medicaid; 2) simplifying transitions between the public coverage programs; and 3) enhancing the use of community-based organizations to enroll eligible children. The initiative is estimated to cost the state $20 to $22 million for the first year, which would bring in additional federal matching funds. The state portion would come from a share of Montana's insurance premium tax.
  • The Healthy Montana Kids plan is expected to extend Medicaid and SCHIP to about 30,000 Montana children through age 18. This could expand Medicaid/SCHIP for children by nearly 50 percent and cover the vast majority of uninsured children in the state. [1] Medicaid coverage would expand from current family income limits of 100 to 133 percent of the FPL to about 185 percent of the federal poverty level (FPL). [2] Income eligibility for the state's SCHIP would expand from 175 percent to 250 percent of the FPL. [3]
  • The plan also calls for a single point of access for members of both Medicaid and SCHIP, promoting easier movement between the programs. It provides presumptive eligibility, meaning that children would be covered while awaiting final eligibility determination. Further, the state will enhance use of 'enrollment partners' such as health care providers, schools, and community-based organizations to help identify and enroll eligible children in Medicaid and SCHIP.
  • Source: The Commonwealth Fund,
  • WI - Doyle Announces 'Transportation to Jobs' Grants.
  • Gov. Jim Doyle announced $4.8 million in grants to help low-income workers throughout the state overcome transportation barriers to employment as they struggle to provide for their families and get ahead. "These grants provide critical support to organizations across the state that help hard-working Wisconsin families get to their jobs," Governor Doyle said. "In these tough economic times, I am pleased that we are continuing this successful initiative and further investing in programs that strengthen our economy and help low-income families get ahead."
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  • MD - O'Malley Launches Web Site to Increase Govt. Transparency.
  • Gov. Martin O'Malley announced the launch of a new state Web site aimed at providing public accountability for state spending. The Web site, created and maintained entirely with Maryland Department of Information Technology resources and staff, provides a searchable format which displays state payment data, capturing the name of the payee receiving payment, location of the payee by ZIP code, amount of the payment and the name of the state agency making the payment. "This new tool will allow the public to see first-hand where tax dollars are spent, ushering in a new era of government accountability and transparency to Annapolis that has become a hallmark of our administration," said O'Malley.
  • MA - Patrick Unveils Push for Wind Power.
  • Wind turbines would increasingly dot the Massachusetts landscape under a plan unveiled by Gov. Deval Patrick to ramp up the state's reliance on wind power over the next dozen years. Patrick said Tuesday he wants the state to be producing 2,000 megawatts of wind electricity annually by 2020, enough to power 800,000 homes - or about 10 percent of the state's current energy needs. Patrick said that increasing reliance on wind power will lure businesses and jobs to the state and help make Massachusetts a leader in clean energy technology.
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  • CO - Ritter Welcomes New Solar Energy Facility.
  • Gov. Bill Ritter and U.S. Senate appointee Michael Bennet celebrated with Colorado State University-Pueblo officials as they made a ceremonial switch to solar-powered energy. The system will provide more than 10 percent of the university's future power needs. It is among the largest solar energy systems on college campuses in the United States. "This is part of changing the future. This is part of us thinking different about how we consume energy," Ritter said.
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  • KS - Sebelius Offers Clean Energy Proposals.
  • Gov. Kathleen Sebelius released proposals on the eve of a new legislative session to encourage renewable energy, create green jobs and curb the state's reliance on carbon fuels. Among the proposals Sebelius issued are stricter energy efficiency standards for new government buildings, and a system that would allow Kansas citizens with wind turbines or solar panels to sell excess power back to utilities.
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  • MI - Granholm Welcomes GM Battery Production.
  • Gov. Jennifer M. Granholm praised General Motors' (GM) plans to begin battery-pack production in Michigan at the first lithium-ion battery assembly facility operated by a major automaker in the United States. The GM news comes just days after an announcement by A123 Systems that it plans to establish a manufacturing center in southeast Michigan for lithium-ion advanced storage systems.
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  • VA - Kaine Unveils Green Jobs, Tax Credit Plan.
  • Gov. Timothy M. Kaine proposed several pieces of legislation designed to promote green jobs as part of his "Renew Virginia" initiative. r Kaine made his announcement from the headquarters of Solar Services Inc., a Virginia Beach company that installs solar panels."Creating green jobs and a renewable energy sector of the Virginia economy is one way we can create opportunity from our current economic challenges," Governor Kaine said. "With this package of bills, not only will we be able to create jobs for hardworking Virginians, but we will be taking proactive steps to reduce our reliance on foreign oil and improve our environment."
  • oliti cs/article/kaine_to_offer_green- jobs_plan_today/24646/
  • WI - Doyle Extends Tax Credits for Small Business.
  • Design Specialties Inc. in Milwaukee will receive $81,000 in Community Development Zone tax credits from the Wisconsin Department of Commerce to help the company pay for its new manufacturing facility and headquarters recently built on Milwaukee's far northwest side. "Despite these difficult economic times it's important we continue to invest in growing companies like Design Specialties," said Gov. Jim Doyle.
  • 9/1/ 12/design-specialties-receives-tax-credits-for-new- facility
  • WI - Doyle Announces Bipartisan Partnership.
  • Gov. Jim Doyle and Gov. Tim Pawlenty are looking into buying items such as software and bulldozers together. They're also interested in sharing helicopters, patrol boats on the rivers that separate them and possibly administrative services for state licenses, prisons and adjoining harbors in Duluth, Minn., and Superior, Wis. Working together could lead to significant savings for both states - including a bulk discount of almost $1 million on road salt alone. Doyle said in Madison that the savings could be tens of millions of dollars long term. He said he expected there to be some short-term immediate savings.
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  • Retail Sales to Rebound in Second Half '09: ICSC
  • U.S. retail sales will fall in the first half of this year but should rebound in the second as an expected government stimulus package lets consumers return to discretionary purchases, according to the International Council of Shopping Centers' chief economist.

    On a conference call on Thursday, Michael Niemira said he expected total U.S. retail sales, including food services, would fall 5 percent in the first half of the year but then rise 2.7 percent in the second half.

    Excluding food services sales, retail sales will fall 6.1 percent in the first half and advance 2.7 percent in the second half, he said.

    Source: ICSC, 2008

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