Historical Iowa Retail Sales per Business
Keith Greiner
September 5, 2016
The average retail sales per business is an excellent measure of the economy and business environment of a state, city, county, or other measurable area.
I began calculating the total retail sales and retail sales per business for Iowa counties when I discovered that nationally recognized source of historical retail sales data was faking their data by using an extended linear regression line year after year after year. I'm not going to provide the company name, here. As a result of their "proprietary method" of determining retail sales, the company's data failed to recognize a community that had a major downturn in the economy when a large, dominant employer pulled out. My financial institution employer had hoped to invest in property, in that community, and gave it serious consideration until we discovered the problem with that nationally recognized data.
I have been following the Iowa retail sales per county ever since, and below, I present the historical retail sales per business for the five largest counties in the state. The data are in dollars recorded on income tax returns at the time of the data collection. Because Iowa collects and reports retail sales data on a quarterly schedule, the average shown here is adjusted for any variation in the number of businesses reported during each of the four quarters. In recent years, the State of Iowa also has published the number of businesses that filed income tax returns. However, that number can fluctuate by quarter, and my calculation of the averages is better indicator of the average number of businesses. Typically, my number is slightly smaller than the number of businesses filing returns that are reported by the State.
The graph shown below covers the years from 1978 through 2015. What we see is that Polk county, the largest in the state, had a deeper and longer downturn of retail sales per business after the peak in 2005. As of 2015, it looks like Polk county has finally exceeded the peak of 2009. Black Hawk county, on the other hand, had a much less eventful decline in retail sales, with its peak occurring in 2008. Black Hawk county recovered by 2012 and has continued a steady growth since. The major city in Polk county is Des Moines, and the two major cities in Black Hawk county are Cedar Falls and Waterloo. Johnson county (Iowa City) peaked at the same time as Polk county, but had not yet fully recovered as of the published data for 2015.
Notice that the most active changes in the trends occurred after 2005. That was the year of the American financial crisis related to questionable practices of some of the country's largest banking institutions. The crisis of 2005 substantially affected Iowa and clearly affected the average annual sales of Iowa retail businesses.
The following image shows three counties in the northwestern part of the state. Here, we see that Clay county continued a higher rate of growth that is related to its position as a regional shopping center. The county seat of Spencer has long had a strong newspaper and a well respected regional radio station. Retail stores include Walmart, Penny's, and Menard's. Pocahontas has none of these, while Emmet county has the headquarters of Iowa Lakes Community College and a radio station. Still, Emmet county had a flat growth since 2003: two years before the 2005 economic decline seen in the above chart.
The third chart in this series shows three counties that have private colleges. Bremer county is the home of Warburg College, Warren county has Simpson College, and Winneshiek county has Luther College. Warren county is contiguous with Polk county, the state's most populous county, while Bremer and Winneshiek are less connected to a major population center. Therefore, it is no surprise to see that the Warren county pattern after 2005 is more like Polk county than the others.