Revenue streams drying up

* Garment sales down 29 percent
* Business sales down 6.7 percent
* Revenues down 13 percent

Garment sales during the first quarter of calendar year 2006 plummeted by 29 percent compared with the same period last year, based on the latest statistics of the Department of Commerce.

The negative trend was also reflected in the CNMI’s business gross revenue collection, which was down 6.7 percent during the first quarter of the year.

Likewise, the government’s general revenues from taxes and fees dropped by 13 percent during the same period.

Government expenditures also went down, albeit at a very slight .9 percent during the first quarter this year compared with the same period last year. Commerce said that from $53.7 million in expenditures during the first quarter of 2005, the figure is down this year to $53.21 million.

Garment sales down

In its January to March 2006 Economic Indicators report, the Commerce Department said that garment sales totaled $125.8 million. During the same period last year, garment exports were valued at $177.6 million. That’s a drop of $51.8 million.

Saipan Garment Manufacturers Association chair James C. Lin earlier said that sales from apparel factories on Saipan continued to drop in early year shipments to U.S. department stores and retailers.

He said that February sales registered only $42.2 million, a 25-percent decline from February last year.

He said the drop in order volumes and declining unit sale prices have combined to put tremendous pressure on the remaining Saipan factories.

As a result of the 2005 worldwide lifting of trade quotas, at least 10 garment factories have reportedly closed down on Saipan while others have undergone massive downsizing of operations.

Statistics showed that garment sales for calendar year 2005 dropped $650.8 million from $826 million in 2004.

In 2003, total garment sales was down at $792.1 million from $831.3 million in 2002.

Any drop in sales would translate to a drop in government user fee collection. The government collects a 3.7 percent user fee on all locally manufactured and finished apparel products.

Finance earlier said that it collected only $126 million in user fee for fiscal year 2005, which is $4 million lower than the annual average collection prior to the 2005 World Trade Organization’s liberalization.

Gross revenue down

The government statistics also showed that business gross revenue was down 6.7 percent during the first quarter of the year.

Likewise, the government’s general revenues from taxes and fees dropped by 13 percent during the same period.

The CNMI Quarterly Economic Indicator report released by the Department of Commerce yesterday showed that BGR totaled some $503,000 or 6.7 percent down from last year’s $539,000.

For the entire year of 2005, BGRT totaled $2.02 million which was slightly lower than the previous year’s $2.034 million.

Meantime, the Department of Commerce reported that during the first quarter of the year, the government collected $48.68 million in taxes and fees, which is 13 percent lower than the same period last year.

Commerce said the government collected $56 million during the first quarter of 2005 and $55.17 million during the second quarter.

During the third and last quarter last year, the revenues plunged to $50.48 million; and further down to $48.64 million.

This decline in revenues is attributed mainly to the abrupt pullout of Japan Airlines in October 2005 and the continued downsizing within the garment industry.

JAL, which used to fly directly from Osaka and Tokyo daily, brought in about 150,000 passengers a year to the CNMI.