The city of Spokanes taxable retail sales growth slowed dramatically in the third quarter of 2007, with sales rising just 2.7 percent over the year-earlier period, the latest available figures show.


That compares with growth of 11.7 percent in the third quarter of 2006. Spokane County also had slower growth, with retail sales increasing 5 percent to $2 billion in the third quarter of 2007, down from 8.3 percent in the year-earlier period.


The county figures include the city figures.


Though taxable retail sales growth is much slower this year than last, the most recent growth rate for the city is about what it can expect in an average year, says Rich Hadley, president of Greater Spokane Incorporated. The citys taxable retail sales in the quarter increased to just over $1 billion, up from $998 million in the year-earlier period. Spokane Countys taxable retail sales grew to $2 billion from $1.9 billion.


Hadley says the fact that Spokane still is growing despite the threat of a national economic decline bodes well for the region.


I think well have a more normal growth pattern for this region than we experienced the last couple of years. Those were extraordinary years, Hadley says. He says the that in normal times, retail sales increase in a range of 3 percent to 6 percent.


He says weakening residential construction creates a ripple effect.


When residential construction declines, with it goes many other forms of spending like household goods. Some of those are going to be deferred, Hadley says.


Among the five Washington cities with the most sales, Spokane had the fourth highest percentage increase, behind Bellevue, Seattle, and Everett, the Washington state Department of Revenue says.


The biggest increase in the city of Spokanes taxable retail sales was in retail trade, which rose $20.6 million to $482.7 million. In Spokane County, retail trade increased $38.3 million to $968.4 million.


Taxable retail sales from hotels, motels, restaurants, and bars in the city of Spokane climbed a combined $7.2 million over the year-earlier period to total $110.7 million in the third quarter, while in Spokane County taxable sales from hotels, motels, restaurants, and bars rose $13.2 million over the third quarter of 2006 to hit $187.9 million.


In the city, taxable retail sales for construction dropped to $140 million from $143 million in the year-earlier quarter, while in the county they rose to $332 million from $304 million.


Taxable retail sales for manufacturing were off as well, dropping to $21.4 million from $25.4 million in the year-earlier quarter in the city, and to $62.2 million from $63.9 million in the county.


Tim Dunivant, budget director for the city of Spokane, says that though full-year taxable sales numbers for 2007 arent available yet, the most recent 12-month period for which the city has numbers has been good, with a 6.6 percent increase.


It reflects whats going on nationally, but overall weve weathered the storm, he says.


If we can get a 2.5 to 3 percent increase on average year after year after year, we consider it a sustainable number to look at for budget projections and a fairly reasonable growth pattern, Dunivant says.


Contact Jeanne Gustafson at (509) 344-1264 or via e-mail at [email protected].