The recession took a bite out of Tri-Cities fourth quarter sales but the local data was not as bad as state and national data, according to data released today by ETSU economists Steb Hipple.
During the fourth quarter, dollar sales fell 1.8 percent in Kingsport, dropped 2.8 percent in Johnson City, and declined 7.1 percent in Bristol.
Statewide sales were down 8.9% in Tennessee and 9.0% for the nation for the same period
On a year-to-year comparison, 2008 sales in Kingsport increased 3.4 percent, increased 0.3 percent in Johnson and declined 4.2 percent in Bristol.
According to Hipple's report for the fourth quarter, Kingsport reported the smallest decline with a loss of 0.4 percent in inflation adjusted sales. Retail volume decreased 3.3 percent in Johnson City and 7.7 percent in Bristol. In comparison, real sales were down 6.3 percent in Tennessee and 3.8 percent in the United States
The declines are sharper for the Combined Statistical Area were dollar sells fell by 7.8 percent to $1,573 million. Adjusted for inflation, retail volume in the Tri-Cities metro area was 9.2 percent below the same period in 2007.
Dollar sales and sales volume decreased in all seven metro counties. The smallest loss was reported by Hawkins County, followed by Unicoi, Carter, Washington (TN), Scott, and Washington (VA) counties.
Hipple's report says that "during 2008 as a whole, the Tri-Cities area was less impacted by the recession than Knoxville or Chattanooga. Dollar sales in the Tri-Cities metro area fell 1.2 percent to $6,175 million (down 4.8 percent in real terms). Chattanooga sales declined 2.9 percent to $6,577 million (down 6.4 percent in real terms) and Knoxville sales decreased 6.percent to $10,974 million (down 9.4 percent in real terms)."
Hipple's analysis of the data says, "There are no surprises in this report. It is now well understood that the nation is in a major recession, and that business conditions will continue to get worse, before they get better.
"The last time we saw such bitter economic news was the severe recession of 1981 and 1982.
"It is worth recalling that the federal government under a Republican President and with a Democratic Congress undertook a massive stimulus package of tax cuts and increased spending. They were successful, but in retrospect, they probably should have done more.
"The overriding danger in this recession is not its severity, but the meltdown and continuing dysfunction of the financial system. As Ben Bernanke, Chairman of the Federal Reserve, has stressed, there will be no recovery until the financial system is healed. And the last time the financial system collapsed was in the early 1930s, and we know what that led to."
Technical note: This report was prepared in March 2009. The “Retail Sales” figures used in this report are “Retail and Food Service Sales” which is the total of sales in NAICS Sector 44, Sector 45, and Subsector 722. The national retail sales estimates are issued by the U.S. Census Bureau. The state, region, county, and city retail sales estimates are based on state sales tax collections and are benchmarked to the 2002 U.S. Census of Retail Trade. The Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics is used to adjust the dollar value of retail sales into "real" or volume terms where the effects of price inflation are removed. The sales data are not adjusted for seasonality so comparisons should be made on a year-to-year basis. All dollar figures in the retail sales tables are in millions of dollars.
<a href="http://faculty.etsu.edu/hipples/RS08q4.htm" target="_blank">CLICK HERE</a> for the full report and data.