(Retail Association of Nevada) – In a sea of double-digit percentage growth figures, taxable sales results for the state’s more metropolitan counties stuck out somewhat disappointingly in the latest month’s taxable sales report. The Nevada Department of Taxation reported year-over-year increases in February taxable sales of more than 20 percent for ten of seventeen Nevada counties, with these ten counties experiencing an average increase of just over 40 percent. Two additional counties reported growth of 10 percent or more for the month, meaning that twelve – or 71 percent of Nevada counties – reported double-digit growth in taxable sales in the latest month.
Unfortunately for the state’s budget, the twelve counties reporting double-digit growth represent only 11 percent of the state’s taxable sales during the month. The state’s two major population centers reported much less dramatic results. Washoe county represents 12 percent of the state’s taxable sales, and it reported a 3.1-percent decline during the month. Clark county represents 74 percent of the state’s taxable sales, and it reported a 3.2-percent increase during the month.
As the disparity between the performance of rural counties versus metropolitan counties becomes more pronounced with each passing month, an observer may wonder whether rural counties are far exceeding expectations, or whether metropolitan counties are falling far short of expectations. In either case, sustainable growth should be valued over short-lived leaps and bounds, though that is not to say that the investment in rural counties won’t continue.
Taking a closer look at overall sales by category, the state, which reported overall growth of 4.3 percent in February, benefitted from substantial growth of investments in manufacturing. Increased manufacturing activity was evident nearly across the board, including in manufacturing categories such as machinery, computers, transportation equipment, chemical, furniture and plastics. The state also reported encouraging increases in clothing sales (+11.5 percent) and motor vehicles and parts (+17.6 percent).
Washoe and Douglas counties, which were two of only four counties to experience a year-over-year decline, appeared to suffer primarily from decreases in discretionary consumer spending categories, including furniture, electronics, building materials and garden equipment, clothing, and general merchandise stores. Mary Lau, President of the Retail Association of Nevada, said, “The declines in discretionary consumer spending in the Reno area are so uniform that it almost appears as if the region is experiencing a population decline.” Lau continued, “Interestingly, both of these counties reported increases in Internet sales, which may account for some of the declines in traditional brick-and-mortar sales.”
In Clark county, notable year-over-year increases included a 20.2-percent rise in motor vehicle and parts sales, a 15.7-percent increase in sales of electronics and appliances, and a 12.9-percent increase in clothing sales. Taxable retail sales taking place in locations classified as accommodations rose 16.6 percent; however, food services and drinking places in the county, the state’s single largest category, declined 1.4 percent.
Lau commented on overall conditions, “Encouraging growth in big-ticket sales categories such as automobiles suggests that consumers are feeling more secure in their perceptions of where the economy is headed, having held off on these types of purchases for an extended period. Spending growth and investments in rural counties are also likely to have ripple effects throughout the state. Perhaps most encouraging is the fact that as a result of sustained positive comparisons, the state is reporting year-over-year growth of 5 percent fiscal year to date (July 2010 through February 2011).”