After a disastrous first quarter, retail sales in the Tri-Cities rebounded moderately in the second, ending a yearlong slump in real sales.
An East Tennessee State University Bureau of Business and Economic Research report shows that from April to June, retail sales increased 2 percent over the second quarter of 2012 in Johnson City to $473 million and 1.8 percent in Kingsport to $375 million, while falling 5.8 percent in Bristol to $249 million.
Retail sales volume in the Tri-Cities Metropolitan Statistical Area increased .1 percent, ending four straight quarters of declining sales.
“The first quarter was a disaster locally,” ETSU economics professor Steb Hipple said Wednesday. “All cities and counties, and therefore the region, was down. We had a nice bounce back considering where we were.”
Hipple said the retail sales levels still haven’t rebounded to those in 2007, before the start of the global recession.
“It’s a welcome turnaround we’ve had broadly speaking, but it might be coming to an end,” he said. “The federal budget sequester continues to take away growth, and a government shutdown could be just around the corner.”
The Tri-Cities led growth among the East Tennessee metro areas, outpacing Knoxville’s 1 percent increase in dollar sales and Chattanooga’s .3 percent rise.
Sales volume decreased in both Knoxville and Chattanooga.
East Tennessee lagged behind both the state, which experienced a 3.2 percent increase in dollar sales, and the nation, which saw a 4.5 percent rise.
Hipple said retail sales figures are one way to gauge economic activity, but a number of factors contribute to an economy’s health.
Retail activity has been promising during the nation’s economic recovery, but overall growth is still slow and unemployment remains relatively high, he said.
The improved second quarter performance is welcome but the first quarter slowdown suggests that the momentum of the retail recovery may be weakening.