Retail sales fell sharply in the city of Spokane in the first quarter of 2008, dropping 5.1 percent from the year-earlier period while slipping a less dramatic 2.6 percent in Spokane County.


The citys drop in taxable retail sales, the biggest drop among the five Washington cities with the most retail sales, compares with growth of 9.2 percent in the first quarter of 2007. Meanwhile, Spokane County, which includes the city, suffered the largest drop in retail sales of the five biggest counties in the state, after sales gained 9.6 percent in the year-earlier quarter. The county numbers include the city figures.


Randy Barcus, chief economist for Avista Corp., says the first-quarter results werent unexpected.


Soft sales tax I think is always disappointing, but I dont think anybody should be real surprised about this, Barcus says. Its pretty clear that the economy is slowing down now across the board.


In the first quarter this year, Spokanes taxable retail sales were $870 million, compared with $916.6 million in the first quarter of 2007. In retail trade, the city dropped to $412.7 million, a 3.9 percent loss from last years $429.5 million. The retail trade number doesnt include construction, manufacturing, utility, and some other sales.


Spokane Countys taxable retail sales dipped to $1.66 billion, from $1.7 billion in the year-earlier quarter. The countys retail trade also fell 2.6 percent, to $817.3 million in the first quarter from $838.9 million a year earlier.


In the city of Spokane, motor vehicle and parts sales fell to $74.3 million from $79.3 million, and in the county such sales dipped to $197.6 million from $212.5 million.


Barcus says the $5 million drop in the citys motor vehicle and parts sales isnt all due to the closing of Empire Ford.


Construction sales in the city dropped precipitously in the first quarter, to $96.7 million from $115.2 million in the year-earlier quarter. Construction previously had risen by about $28 million in the third quarter of 2007, but in the first quarter of 2008 tumbled to $206.9 million from $231.8 million the previous year.


Barcus says such a drop in construction sales commonly precipitates a drop in related industries, such as home furnishings, which were down to $21.6 million from $25.5 million in the city, and dropped to $33.3 million from $36.4 million in the county.


When home sales go down, furniture sales go down, Barcus says.


Manufacturing sales slipped in the county to $41.1 million from $43 million in the year-earlier quarter. In the city, however, manufacturing sales grew modestly to $17.7 million from $17.3 million in the year-earlier period.


Spokane is doing relatively better, but the brakes have been on in the first six months, Barcus says. He says he expects a small bump in taxable retail sales as people spend federal economic stimulus checks but he is less optimistic than he was due to increases in food and energy prices.


For the year 2008, I think Spokane and the city of Spokane will now be even with 2007, rather than the 4 percent to 5 percent increase I was expecting for 2008 when I made my predictions last fall, Barcus says.


Im not expecting cheerful numbers in the second quarter, he says.