Utah’s 1% local sales tax of $36.92 million in January 2014 (representing November 2013 sales) was 0.5% lower than the $37.11 million distributed a year earlier. For the the first five months of fiscal year 2015, local sales tax distributions are up 4.8%. But during the last three months the growth rate has slipped to 2.8%.
Utah’s economy may have slowed a bit more due to layoffs by the federal government due to the impending shutdown. Utah’s employment growth rate slipped from 3% in the summer months to 2.2% in November. Total construction values in 17 Wasatch Front & Back counties fell 3.5% between September and November compared to a year earlier. In Salt Lake County, residential construction rose almost 7%, while commercial construction fell 64%, driving a 24% total decline in new construction.
Salt Lake City’s distribution fell 0.7% in January. Sandy’s distribution fell 6.2%, suggesting an almost 12% decline in sales for November. On the plus side, Draper’s distribution rose 6.2% and Murray and Midvale’s rose 4.5%.
In Utah and Weber County, city distributions rose between 1% and 2% in January. Utah County’s distribution for its .25% tax inexplicably fell 7.4%.
In Davis County, distributions for Bountiful, Clearfield and Layton rose 5.8 to 5.9%. Farmington’s distribution rose almost 30%, implying a direct sales increase of 60.3%.
St. George’s distribution rose 3.4%, implying a 7.3% increase in November sales.
December’s distribution at $36.87 million, representing sales from October, was up 4.3% from a year earlier.
Salt Lake City’s sales were up 3.4%, below the statewide average. Other cities in Salt Lake County that did better than the statewide average were: Sandy (6.5%), Murray (5.2%), Midvale (8.8%), and Draper (10.1%).
This month we also calculated the “imputed” direct sales for the month, a number we computed going backwards with the 50% population / 50 % point-of-sale formula.
Based on this calculation direct sales growth were:
We thought October sales would have been soft given that consumer confidence in the U.S. slipped to 73.2 from 77.5 in September 2013. There was a foreboding edge in the air due to the government shutdown. Nevertheless, U.S. consumers increased their purchases of new automobiles and light trucks by 10.6% in October.
Since Washington DC came to terms with their budget in December, we are feeling quite a bit better about the February distribution for December sales.
The November distribution, which came out last week and represents taxable sales for September 2013, was up 4.5% compared to a year earlier. Statewide distribution totals were $44.31 million, up from $42.40 million in November 2012. For the first three months of fiscal year 2014, the statewide 1% local sales tax is up 6.1%, fairly close to our forecast of 6.5% (which assume no more major fiscal problems due to the federal debt ceiling and budget). The 6-month growth rate is almost 3% lower at 3.8%, suggesting that a realistic forecast still ranges between the low 2.4% pessimistic and 6.5% baseline scenarios.
Distributions among Utah’s major cities range between -3.6% (Tooele) and +15.3% (Farmington) in November. In Salt Lake County, South Jordan’s distribution was up 7.6%, in contrast with its 3-month growth rate of 1.4%. Draper’s distribution was up 5.1% in November and 12.4% for the first three months of fiscal year 2014. Salt Lake City’s distribution rose 4.6% and it’s year-to-date growth is up 6.1% from last year.
In Utah County, Orem led with a 6.6% gain, followed by Lehi at 4.8%. Fiscal year totals ranged from 7.0% to 7.9% for Provo, Orem and Lehi.
In Davis County, the two largest cities, Layton and Bountiful, saw respective increases of 5.8% and 5.4%.
St. George distribution was up 7.5%, partially due to its housing recovery.
Rebounding from a decline in September, U.S. cars and light trucks rose 10.6% in October compared to the same month a year earlier. Automakers sold 1.21 million units in October 2013 (Table 1) compared to 1.09 million in the same month last year. On an annualized basis this equals more than 15 million units (Chart 1). Although October 2012 sales were soft due to Hurricane Sandy, this October could have been much weaker due to the federal government shutdown and impending debt ceiling. Nevertheless, “the fundamentals of an aging fleet and widely available, relatively cheap credit continue to unleash pent-up demand,” according to Michelle Krebs, senior analyst at Edmunds.com.[i]
Three of the top five automakers increased sales in double-digits in October. “General Motors, the nation’s largest automaker, led the way with sales up 16% to 226,402.”[ii] Ford sales were also strong, up nearly 14% due to good sales of its F-Series trucks. GM’s Silverado models were up 10% in October. And, Chrysler’s 11% gain was to a large extent due to its 18% increase in RAM trucks (Table 1).
Among the top models, the Ford Fusion saw the biggest percentage gain at 71.3%, to 21,740 units (pictured below). The second largest gain was made by Toyota’s RAV4 with a 60.8% increase.