Taxable retail sales across the state of Washington shot up 10.5 percent in the second quarter, the largest quarterly increase in 16 years, and increased by similar amounts in both Spokane County and the city of Spokane.


Taxable sales reported by businesses statewide totaled $27.6 billion in the second quarter, up $2.6 billion from the year-earlier quarter, says the Washington state Department of Revenue. Taxable retail sales in Spokane County jumped 10 percent in the quarter, to $1.8 billion, while the city of Spokane saw a 10.1 percent jump, to $960.4 million. The citys numbers are included in the countys.


One of the strongest areas of growth in Spokane County was in sales of building materials, garden equipment, and supplies, which totaled about $126 million in the second quarter, up 21.1 percent from the year-earlier period. Sales for the same category statewide were up 12.8 percent. Those numbers dont include construction sales, which in Spokane County were up 11.8 percent, to $270.5 million.


Reid Ziegler, of the Spokane-based Ziegler Lumber Co. retail chain, says the building supply market here for the last three years has been the best hes ever seen.


I think its because we have solid employment numbers, Ziegler says. People have jobs and are comfortable with spending money. Family-owned Ziegler Lumber operates seven Ziggys building materials stores in Eastern Washington and North Idaho.


The strong residential real estate market boosted sales of building materials, but even as housing sales slow, people still buy building supplies, he says. A lot of people who might not change homes, or who might not go to more expensive homes, put money back into their homes, because they dont lose value over the long haul, he adds.


Chang Mook Sohn, chief economist with the Department of Revenue, says that the retail spending increase is largely due to extremely strong job growth and income increase.


Employment in Washington state grew at a 3.1 percent pace in the April-to-June period, twice as fast as the healthy U.S. pace of 1.4 percent, Sohn says.


He says third-quarter retail sales numbers are coming in at about 8 percent higher than the year-earlier period, and he expects fourth-quarter numbers to be above last years, though perhaps not as robust as the gains in the second and third quarters. Im not expecting a sub-par performance, he says.


Even though gas prices were high in the second quarter, sales of recreational vehicles rose 11.7 percent statewide, though they were up only 1.7 percent in Spokane County.


If you are concerned about gas prices, you would not be buying a recreational vehicle, Sohn says.


Increased income has a more direct effect on such spending than does the price of gas, he says.


The state reported that spending on accommodations and food services in Spokane County came in at roughly $170.7 million in the second quarter, up 7.3 percent from a year earlier, a slightly higher gain than the state average.


The Spokane Regional Convention and Visitors Bureau confirmed the strong numbers and says it expects the good results continued through September.


Citing a recently released report by Smith Travel Research, CVB President and CEO Harry Sladich says hotel and motel occupancy rose 13.5 percent in Spokane County in September compared with a year earlier.


Sladich said 2005 was a huge year, in which Spokane County was second only to King County for hotel and motel expenditures. But 2006 is even higher.


Contact Mike McLean at (509) 344-1266 or via e-mail at [email protected].