Retail activity continued to expand in the Tri-Cities in 2011’s third quarter, according to a report from local economist Steb Hipple, with the East Tennessee State University Bureau of Business and Economic Research.
“The positive retail picture of recent quarters did not change during the summer months,” Hipple said. “In terms of dollar sales or inflation adjusted real volume, retail activity increased in the markets covered by this report.”
Adjusted for inflation, retail volume in the metro area was 1.5 percent higher than in the third quarter of 2010, the report showed; and from July to September, dollar sales in the Tri-Cities rose 5.3 percent to $1.7 billion.
In each of the three cities, sales volume adjusted for inflation also rose: by 7.5 percent in Kingsport; 3.8 percent in Johnson City; and 1.1 percent in Bristol. On a year-to-year basis, dollar sales increased 11.5 percent to $369 million in Kingsport; 7.6 percent to $471.3 million in Johnson City; and 4.9 percent to $260.8 million in Bristol.
Dollar sales were higher in all the Tri-Cities counties except for Scott County, while inflation-adjusted sales activity increased in Sullivan, Hawkins, Washington (VA), and Washington (TN). Sales volume was lower in Unicoi, Carter, and Scott Counties.
The summer months were good to Knoxville and Chattanooga, according to Hipple’s report. Dollar sales in the Knoxville metro area jumped 11.6 percent to $3.1 billion, while the Chattanooga metro area saw retail revenues increase 9.3 percent to $1.9 billion. Adjusted for inflation, sales volume was up 7.5 percent in Knoxville and 5.3 percent in Chattanooga, the report said.
In Tennessee, dollar sales increased 6.5 percent to $21.2 billion. Sales volume was 2.6 percent above 2010 levels, marking the sixth quarter of real growth in retail activity (following ten consecutive quarters of declining sales volume during the recession).
Nationally, dollar sales increased 7.9 percent, up for the eighth quarter in a row, and real sales were higher by 4 percent, marking the seventh consecutive quarter of real growth. Hipple notes that U.S. retail activity declined for seven quarters during the 2008 to 2009 business recession, after 20 consecutive quarters of real growth during the 2002 to 2007 business expansion. Still, he pointed out, consumer spending remains only one bright spot in the overall dreary economic conditions, especially lagging growth in production and employment.
According to Hipple, the local and regional economic picture is “much brighter” than the national picture.
“Job creation continues to be high and employment levels are almost back to pre-recession numbers. If local people are working, then they have money to spend, and that has been reflected in the local and regional retail sales data,” he said. “This relatively good retail performance should continue through the holiday selling season in the Tri-Cities area.”
Yet the Tri-Cities does not exist in an economic vacuum, he cautioned.
“The regional economy cannot continue to outperform the national economy, Hipple said. “Ultimately a sluggish national economy will impact local business conditions.”