With the exception of new car registrations, which continued

With the exception of new car registrations, which continued a steep decline begun in January, the indicators used for measuring business activity in Virginia continued to show stability.

According to Roy L. Pearson, editor of the Virginia Business Report, published monthly by the Bureau of Business Research at the College of William and Mary, the precipitous decline in car registrations was caused by consumers who rushed to buy cars in December to capitalize on the tax and interest write-off. Those tax breaks disappeared when the 1986 tax reform legislation became effective Jan. 1.

February’s 16.8 percent decline in car registrations compared to last year’s figure paralleled a similar drop in January. “The question still to be answered in coming months,” Mr. Pearson observed, “is just how much car-buying was borrowed. When new car buying does return to a more normal level later in 1987, we can still predict that in most months it will be below the 1986 pace.”

Building permits increased 5.4 percent overall in February, showing the 33.8 percent decline registered in January to be an apparent statistical blip. However, Mr. Pearson noted that February increase still remains “anemic” beside the 1986 annual average of 14.7 percent growth.

Indirect evidence, Mr. Pearson continued, of the health of the economy in Virginia was provided by strong advances in both electricity and water consumption. He said those two indicators historically are tied to industrial production figures.

However, Mr. Pearson cautioned, “the weather has wreaked havoc with our 1987 data to date as well as the patterns of economic activity, so little can be said with confidence at this time.”

Data fouled by weather; reporting difficult

The Bureau faced a perplexing problem in attempting to report, and interpret, the January taxable sales