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‘Snapshot’ shows residents’ incomes, spending growing
by Gregory R. Norfleet · News · September 22, 2022
On average, West Branch residents make about $36,200 individually and $73,100 per household, according to a recently released “Market Snapshot” of West Branch and the surrounding area.
The community spends about $53.3 million per year in 12 major spending categories and, within five years, that number should increase between 12 and 13 percent to $60.1 million.
The report, commissioned by West Branch Community Development Group, states that the average household includes 2.4 people and that the average person spends more than $800 annually on clothing and related services, nearly $1,250 on entertainment and recreation, $3,500 on groceries, and $1,400 on eating out.
Adding 12 to 13 percent to the above figures increases individual spending to more than $900 on clothing, $1,400 on entertainment, $3,900 on groceries, and $1,600 on eating out by 2027.
Further, Main Street Iowa, which conducted the study for WBCDG, also predicts the population will grow by 1.07 percent in the next five years.
“West Branch is experiencing growth,” West Branch Community Development Group Executive Director Jessi Simon told the West Branch City Council at its Sept. 6 meeting. “And our demographics are skewing young.”
If 1-percent growth seems slow, the state’s expected growth comes in at 0.19 percent by 2027, less than one-fifth the growth West Branch should experience, reads the report.
These statistics come from the 2022 Market Snapshot of the community, as measured by population in West Branch and within five minutes of the town’s center. Some data also encompasses people who live within 10 minutes of the town’s center, or even 20 minutes.
City Administrator Adam Kofoed said he appreciates the data but believes the report “underrepresents our growth and vacancy rates.”
“Based on what we’ve had going through Planning and Zoning (our population) will be quite a bit larger,” he said, referring to expected new housing developments. “I think we’ll be quite a bit higher than those initial estimates.”
Kofoed said that if interest rates continue to rise, that may slow down West Branch’s growth closer to what the Market Snapshot predicts. The Federal Reserve plans to increase interest rates again this year and some predict the 2.25 to 2.5-percent rate could reach 4 percent by year’s end.
“Overall, it’s positive news,” the city administrator said, adding that West Branch is growing faster than most other Iowa cities.
The report states that residents average 40.4 years old, and 98.2 percent of residents aged 16 and up hold down jobs.
The average age increases when the report adds in residents living within 10 minutes, up to 41.6 years old. However, it drops significantly when it adds in Iowa City, the University of Iowa, and others within 20 minutes, to 30.5 years old. The state average is 39.5 years old.
Salaries follow that same fluctuation, with those within 10 minutes increasing the average to $41,120 a year, then dropping to $39,257 when grouping in the Iowa City area. The state average is even lower at $36,238.
However, the percentage of those employed lowers the farther away one gets from West Branch. The 98.2 drops to 97.6 for those within 10 minutes, then 97 percent for those within 20 minutes. The state employment rate stands at 95.7 percent.
Overall spending
The report includes a section, Retail Demand Outlook, that shows data on spending for people who live inside West Branch or live within 10 minutes of the center of town (close to Corridor Home Redesign).
This section shows the community spends about $53.3 million in 12 key retail areas, from housing to food to health to transportation.
It estimates that figure will increase by nearly 12.8 percent in just five years to $60.1 million.
The five largest spending categories:
• Home, including mortgages and “the basics.” Residents will spend nearly $12.5 million in 2022, or 23.4 percent of that $53.3 million. The report estimates that number will increase to $14.1 million, or 23.5 percent, of the $60.1 million total for 2027.
• Food at home comes in second, with the community spending $9.8 million on groceries, or 18.5 percent of its retail dollars. While the total will increase by nearly 13 percent in five years, the percentage of retail spending will remain the same.
• Insurance comes in third at $7.9 million, or 14.9 percent of retail spending. That figure will rise to $8.9 million in 2027, dipping to just over 14.8 percent.
• Transportation comes in next at $6.5 million, some 12.3 percent of retail spending. That percentage will dip slightly to 12.2 percent, but increase to $7.4 million of the total in five years.
• Coming in fifth is a noteworthy sign of West Branch culture: We spend $4 million, or 7.5 percent of our retail dollars on eating out. The Market Snapshot actually labels this, “Food away from home,” and estimates this figure will grow to $4.5 million in five years.
Spending
v. income
However, while spending will increase by nearly 12.8 percent overall, the average household income will increase by about three-quarters of a percent, from about $73,100 to $73,750, or by about $650 annually.
Kofoed said he does not know how those data points reconcile and wonders if MSI’s report cannot account for side jobs or secondary incomes like selling products online.
He said that if incomes do not increase, he does not see how spending could grow proportionately.
“The numbers don’t add up in that perspective,” he said.
Main Street Iowa Business Specialist Robin Bostrom, responding to the Times by email, said the Retail Demand Report is new to the Market Snapshots provided to each Main Street chapter. The data replaces a “Sales Surplus & Leakage” report by Esri, a data-collection company.
“The Retail Demand Report is a new report that we have just started to look at, so I am also learning the ins and outs of this report as well,” Bostrom wrote. “We will be learning as we go.”
Still, Kofoed predicts that with more homes and more people, more businesses will follow, which will draw more people into town from farther away.
“Iowa City is growing our way, and we’re growing toward Iowa City,” Kofoed said. “There will be more buzz around the town so we should see possible increased economic activity. … I think we’ll see less retail leakage to other communities, but the internet is still a big factor for where people get goods and services.”
The full report appears on the City of West Branch’s website, at westbranchiowa.org.
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