Business Barometer is a quarterly GSI publication that highlights significant economic indicators for the greater-Spokane region, as told by four local economists. The blog series contains eight posts; you’re reading post #3.
Reminder: sales tax reporting lags one quarter behind other indicators.
“It is heartening to note that both the retail-trade sector and overall taxable sales were up more than 5.5% in Spokane in the fourth quarter of 2014,” says Shaun O’L. Higgins, Managing Principal of The Oxalis Group LLC, and a longtime observer of the regional economy. “Given our employment growth, that number is likely to show strongly when the first-quarter numbers come in, and to show even more strongly based on national numbers on retail sales — and great numbers for auto sales — in May. With inflation continuing at low levels, our retail sales numbers reflect real spending increases, particularly by consumers.”
Chief Investment Officer for Washington Trust Bank, Steve Scranton, characterizes retail numbers as showing “healthy growth,” but expressed caution that both local and national retail sales increases are still driven in great part by new car sales. “Offers for 0% financing, some for 72 months, are pulling sales forward – sacrificing future sales.”
Grant Forsyth, Avista chief economist, echoes this concern. “If the auto market cools off, it will have a noticeable impact on the tax revenues for city, county and state governments.”
“Much of the improvement in retail sales is a result of job growth,” says Higgins. “While fourth quarter 2014 continued to lag numbers from five years ago, we have about 5,000 more people working now than last year. With more people working and the cost of living in check, it is no surprise that spending is increasing on most fronts.”
Forsyth notes, “Low gas prices are helping retail sales, especially with lower-income consumers, but in the long run, what really matters is wage and income growth and for the time being, that remains modest.”