High gas prices may be a factor in slow Nelson economy

By Bryan Gentry

Published: August 27, 2008

Consumer spending in Nelson County, much of which comes from tourism, is a strong driver of the local economy.

But high gas prices may have caught up to the county in the first half of 2008.

Taxable sales in the county dropped more than 3 percent in from January through June, compared to the same period of 2007.

The sales data from Virginia’s Department of Taxation doesn’t worry Maureen Kelly Corum, the county’s director of economic development and tourism. She said other figures show that the economy is still growing steadily.

“The good news is, overall, our numbers continue to increase each year, and have been … since 2004,” she said.

With the help of Wintergreen Resort, tourism is the county’s “economic engine,” she said, and it seems that people are still visiting the county.

“People are traveling. They may make their decision a little later, or a little closer to the trip … but they are traveling,” Corum said. “And they are spending money when they get there.”

Wintergreen’s peak ski months are some of the county’s best months. In January 2008, the county saw a 23 percent jump sales and use tax revenue, compared to 2007.

Corum said festivals in Nelson County have drawn fewer people this year, but they have brought in higher sales.

She said the county’s lodging and dining businesses did well earlier in the year, too.

Also, much of this year’s drop in sales and sales tax revenues are the result of unusual increases last year.

For example, for May 2007 the county’s sales and use tax revenue spiked to about $82,500. When that figure was about $69,000 in May 2008, it was a return to normal, Corum said.

Factoring out the unusual May 2007 activity, the drop in sales in 2008 was only about 1 percent.

Corum said some drop in sales is not unexpected.

“This year, let’s face it, we’re talking about the gas prices, we’re talking about housing, and customer uncertainty,” she said. “That’s not Nelson County. That’s not our region. That’s nationwide.”

Virginia as a whole had about a 1 percent decrease in sales in the first half of 2008, compared to the same period in 2007.

Other counties near Nelson had increases, with strong sales jumps in Bedford and Campbell Counties. Amherst County had a slight increase in sales, and Appomattox County’s sales dropped by about 4 percent.

In other economic indicators, Nelson County continued to fare well. In June it had the lowest unemployment rate of all in the Lynchburg region, though it had a slow employment growth rate, below 1 percent.

Most localities around the county had about a 2 percent employment growth rate from June 2007 to June 2008.

Corum said she thinks the county will see increased sales in the second half of 2008.

“Overall we’re on track this year for another good year in retail sales,” Corum said. “In this economy, I think that means we’re doing well.”