LEXINGTON, KY -- Residential building permits, a key economic indicator, fell dramatically in each of Lexington's surrounding counties during the first quarter, a stark contrast to the more than 40 percent increase that Lexington experienced, reports The Lexington Herald-Leader in its Saturday edition.
It's such a quirk that the president of a group that tracks building permits questioned whether Lexington truly is seeing the beginning of the economic turnaround that Mayor Jim Newberry hoped for in his pitch of the city's upcoming budget.
Noting the increase in residential building permits in Lexington, Newberry said there's "legitimate optimism" for the coming year as he offered a budget that increases city spending by 1.5 percent. He cautioned, though, that the city recognizes "the economic uncertainty of the time in which we live" and plans to maintain a "significant cash cushion in the event our revenues fail to meet our expectations."
Residential building permits increased 41 percent in Lexington in the first quarter to 194, from 138 in the same time period a year ago, according to information service The Market Edge.
But for the eight counties measured — Fayette, adjoining counties and Franklin — the number of residential permits fell 26 percent year-over-year.
Dale Akins, president of The Market Edge, said Lexington's increase might have primarily been a statistical boost benefiting from its "really, really low" performance in the first quarter of 2008.
He said the numbers in the second quarter of 2008 — when residential permits jumped 97 percent compared to the first quarter — show that there was some "pent-up kind of inactivity in the first quarter and then people started building again." The city then saw a decline of more than 20 percent between the second and third quarters of 2008 as things evened out.
Without that strange spread in permits, any jump in the first quarter year-over-year would have been less and perhaps not even been a jump at all.
One surprise, he said, is that Lexington surpassed Louisville in residential building permits this past quarter, with Louisville issuing just 161.
To put it in more general terms, that's 2.05 permits for every thousand people in Lexington and 0.6 for every thousand in Louisville.
"Louisville continues to decline," Akins said, noting it's the first time Lexington has surpassed Louisville since he began following the cities in 2004. "The trend is just negative, negative, negative all the way."
Dewey Crowe, Lexington's director of building inspection, compared Akins' analysis about Lexington to speculation and emphasized the city's increase in the most recent quarter. So far in April, the city has issued around 45 residential building permits, he told The Lexington Herald-Leader.
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