An important economic indicator took a step back in June, as consumers eased off on spending.
After more than two years of reliable gains in the 5 percent to 10 percent range, taxable sales stumbled in Clark County and the state. The value of all goods sold in the county fell 0.3 percent year over year in June to $2.85 billion, the state Department of Taxation reported Tuesday. Statewide, sales gained 1.2 percent, rising to $3.96 billion.
Though the general sales trend of the last two years suggests the local economy is headed up, the newest numbers show Southern Nevada is still in recovery mode, and economic uncertainty could keep things that way in coming months, experts said.
Steve Brown, director of UNLV’s Center for Business and Economic Research, said a slowdown in tourism is likely behind the softer sales stats. Visitor volume was down 0.9 percent year to year in June, and off 0.3 percent in the first six months of 2013, according to the Las Vegas Convention and Visitors Authority. And slumping machinery manufacturing and printing sales reflected sluggish business spending, Brown said.
“I think there is an overall lack of confidence that economic growth will continue,” he said. “If we look at our most recent business survey in July, businesses said their weakest expectations were for hiring. And as long as businesses remain reluctant to hire, consumers will be reluctant to make purchases.”
Added Brian Gordon, principal in local research firm Applied Analysis: “One month does not make a trend, and there can be ups and downs in any given period. But this latest report does demonstrate that the local economy, while improving, remains somewhat fragile, with a long road to go before reaching back to pre-recession levels.”
Clark County’s taxable sales were 12.2 percent below their $3.24 billion record for June, set in 2006. But county sales were up 17.3 percent from their June 2010 low of $2.43 billion.
As through much of the recovery, consumers focused in June on bigger-ticket items, a sign they’re still replacing worn items they held onto during harder times, Gordon said.
Car sales were up 6.9 percent countywide, to $302.6 million. Clothing retailers posted a 4.1 percent jump, to $294.3 million. Purchases of electronics and appliances jumped 15.9 percent, to $94.4 million. And building material and garden equipment and supply stores experienced an 11.6 percent spike, to $101.8 million.
Meanwhile, spending on smaller-scale discretionary goods struggled. Sales inside bars and restaurants, which made up 27 percent of county spending, were flat, gaining 0.7 percent to end June at $762 million. Sales inside general merchandise stores, including department stores, ticked up 1.6 percent, to $257 million.
Gordon said factors that could cut into nonessential spending include new payments from cars and other big purchases, as well as rising health-care costs and January’s 2 percent rise in the Social Security payroll tax. What’s more, incomes are essentially flat since the recession.
“A number of factors suggest there could be overall weakness related to consumer spending, and June’s numbers are one sign that we’re not out of the woods,” Gordon said.
And despite noticeable gains in new-home permits and building projects on the Strip, countywide construction spending dipped 9.2 percent year over year in June, falling to $44.4 million, as infrastructure building faltered. That figure was also 78.7 percent below the $208.8 million in construction spending in June 2008.
Gross revenue collections from sales and use taxes, which help fund prisons and social services, totaled $309 million, a 2.25 percent increase from a year earlier.
The General Fund portion of the sales and use taxes finished fiscal 2013 0.34 percent, or $3 million, above projections of the Economic Forum, a nonpartisan group that forecasts revenue for state budgets.
Contact reporter Jennifer Robison at firstname.lastname@example.org or 702-380-4512. Follow @J_Robison1 on Twitter.