Consumers kept their wallets clamped shut in July and forced an inauspicious start to the state’s new fiscal year.
Taxable sales across Nevada came in at $3.1 billion in July, an 18.8 percent drop from $3.8 billion in the same month a year ago, the state Department of Taxation reported Thursday. Clark County’s falloff was even bigger, with taxable sales stumbling 20.6 percent, from $2.8 billion to $2.2 billion year over year in July.
"The numbers are certainly not encouraging, with every one of the major sectors showing continued declines," said Jeremy Aguero, a principal in local research firm Applied Analysis. "Throughout the middle of the summer, our economy continued to contract, and consumers overburdened by debt and concerned about mounting rates of unemployment continued to pull back on expenditures by necessity or by choice."
Nevada’s major industries posted some of the steepest declines.
Construction sales fell 28 percent. General merchandise retailers such as department stores rang up 10.8 percent fewer sales. Clothing stores lost 9.7 percent in sales, while furniture retailers posted 32 percent fewer sales. Merchant wholesalers of durable goods — companies that sell big-ticket items such as equipment and appliances to other businesses — had 35.7 percent fewer sales.
The "Cash for Clunkers" federal car-rebate program launched July 24, but a week’s worth of government incentives couldn’t spare dealers of cars and car parts from a dismal July. The sector’s sales fell 31.7 percent statewide and 34.1 percent in Clark County.
Rich Abajian, general manager at Findlay Toyota, said many dealerships held their earliest "Cash for Clunkers" sales over to August because they were uncertain in the first few days how they’d collect on the $3,500 or $4,500 rebates the government said it would cover.
Abajian said he expects a noticeable boost in year-over-year car sales in August. Rather than declining, sales should be stable compared with statistics from a year ago.
"Sales will move to where they’re about even with last August, which to us will be a great increase," Abajian said. "Flat is the new increase."
Abajian also said July started slowly for his dealership, but sales in the second half of the month resembled activity the company would normally see at that time of the year. July’s sales were also better than June’s closings, Abajian said.
The newest report did feature some bright spots.
Sales inside restaurants and bars — Nevada’s biggest source of taxable retail sales — rose 2.3 percent statewide year over year in July, and 2.7 percent in Clark County. It’s the first time in 17 months the category has seen an upswing, Aguero noted, though he added that one month of improvement doesn’t indicate a trend.
Consumers also spent more on entertainment in July, giving a 33 percent boost to transactions in the performing arts and spectator sports category. Sales in the category covering management of companies and enterprises rose 258 percent, while telecommunications sales jumped 34.6 percent. Heavy construction and civil engineering, which covers mostly public works projects, increased 21.7 percent.
July’s overall figures don’t just indicate a sustained economic downturn, they also portend further shortfalls compared with economic projections the Legislature used to form the state’s budget.
Gross revenue collections statewide were $242 million in July, which was 13.5 percent below July 2008’s numbers. In the first month of fiscal 2009, which began July 1, the general fund portion of sales and use taxes fell below forecasts by 0.58 percent, or $4.6 million. The collections help fund prisons and schools, among other services.
The month also brought an increase in the sales tax rate, which rose from 7.75 percent to 8.1 percent in Clark County on July 1. But with just one month’s data, it’s too soon to tell if the higher rate has affected consumer spending, Aguero said.
Contact reporter Jennifer Robison at firstname.lastname@example.org or 702-380-4512.BY THE NUMBERS
• Statewide sales, -18.8 %
• Clark County sales, -20.6%
• Washoe County sales, -15.2%
• Construction industry classification, -28.0%
• Merchant wholesalers – durable goods, -35.7%
• Motor vehicle parts and dealers, -31.7%
• General merchandise stores, -10.8%
• Clothing and accessories stores, -9.7%
• Food and beverage stores, -3.2%
• Home furniture and furnishings, -32.0%
• Accommodations, -20.0%
• Food services and drinking places, +2.3%
Source: Nevada Department of Taxation