An ongoing trade war with China, an attempt to impeach President Trump, and a presidential election within the next 12 months have the potential to influence the economy and retail sales growth in 2020.

Grant Forsyth, chief economist for Spokane-based Avista Corp., says some of those factors may play a role in slower retail sales growth in 2020, both regionally and nationally.

He’s predicting growth in sales to be “fairly slow with a little uncertainty.”

At press time, the Washington state Department of Revenue had only reported retail sales figures from the first quarter of 2019.

Spokane County saw taxable retail sales growth of 5% in the first quarter this year compared to 2018. However, that was down from 10% first-quarter growth in 2018 from 2017.

As he does annually, Forsyth bases his prediction on regional unemployment insurance claims, residential permit filings, and performance of the S&P 500 index.

It’s a lower prognostication from what economists from around the state are anticipating.

Patrick Jones, executive director of Eastern Washington University’s Institute for Public Policy and Economic Analysis, says he “wouldn’t deviate too far from what state economists are saying” as they predict retail sales growth to be in the midsingle digits.

“We have a mitigating factor in that we’ve got a large employer (the Amazon fulfillment center) scheduled to come online during the first or second quarter of the year,” Jones says. “While the wages are relatively low, there’s still the possibility of more disposable income being available.”

Forsyth says the Pacific Northwest continues to feel the effects of the prolonged U.S.-China trade war. He says, however, he’s been encouraged by the progress the two sides seem to have made in negotiations recently.

“Washington state is still pretty exposed to the ongoing trade war,” Forsyth cautions.

Overall household consumption for goods and services, Forsyth says, is currently the strongest area of the economy.

“We’ve seen pretty good, real wage growth. But if (consumer) confidence were to change at some point during the year, at the moment there is no other sector to lean on, and that’s problematic,” he says.

Unlike past decades when the Inland Northwest tended not to mimic the national economy. Today, Forsyth says area economists keep a close eye on economic trends around the U.S.

“The increasing urbanization of the region makes it more reflective of what’s going on around the country,” Forsyth says. “That’s particularly true of Coeur d’Alene. It never used to imitate the national economy, but in recent years, it has.”

This year, Spokane saw the loss of retailer Sears in the NorthTown Mall on the North Side, and early next year, Sears in the Spokane Valley Mall is scheduled to shutter its doors.

Mark McKee, manager of The General Store at 2424 N. Division, says brick-and-mortar stores continue to struggle navigating the wake created by online shopping.

Sales for the North Side retailer are up 3% in 2019 compared to last year.

The one-stop Division Street fixture carries automotive parts, clothes, shoes, outdoor and sporting goods. McKee, who has managed the store the last seven months, says the store is revamping its business model for 2020.

“We’re going to implement same-day delivery starting next year,” says McKee, citing the Amazon effect that has redefined the retail industry.

“You’ve got to stay competitive to remain relevant if you’re a traditional brick-and-mortar store,” he says. 

The General Store also has hired a business-to-business representative as part of a new store program.

“We believe this will allow us to grow the business,” he says.