AECCafe: The AEC Lens

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Posts Tagged ‘Retail sales’

Mid-June Economic Nuggets Focusing on Retail, Inflation and Housing Starts

Friday, June 21st, 2019

well ask, since it went by so fast − there are the following economic nuggets from various private and public sector firms and agencies to be aware of and mull over.

Mid-June Economic Nuggets Graphic

Consumer Spending Becomes Lethargic

In the ‘second estimate’ of U.S. Q1 2019 ‘real’ (adjusted for inflation) gross domestic product (GDP) published by the Bureau of Economic Analysis (BEA), the quarter-to-quarter annualized pickup was a strong +3.1%. Consumer spending, however, which usually plays a major role in GDP’s advance, was relatively quiet this time around. The Personal Consumption Expenditures (PCE) line item of GDP was only +1.3% per annum. It was soundly beaten by Gross Private Domestic Investment, +4.3%, and an improvement in net foreign trade, with exports +4.8% and imports, -2.5%. Investment was led by spending on intellectual property products, +7.2%.

A shift towards lethargic consumer spending has also become apparent in recent retail sales figures. Total U.S. retail and food services sales in May were +3.2% year over year. Retail as a standalone was +3.1% and ‘food services and drinking places,’ +3.7%. Less than a year ago, in July 2018, retail sales were +6.2% y/y and ‘restaurant, fast food, bar, and tavern’ sales, +9.6%.

Retail Sales Mainly in a Range of +3.1 to +3.7% Y/Y

Within retail, and as set out in Graph 1, several shopkeepers achieved May sales increases ranging from +3.1% to +3.7% y/y. ‘Health care and personal care stores’ rang up receipts of +3.4% y/y; ‘general merchandise stores’, +3.3%; and ‘gasoline stations,’ +3.2%. Gasoline station sales, despite drawing more from aligned variety store activities, can still be heavily influenced by fluctuations in the price of petrol. In the latest month, the price of gas was flat compared with 12 months prior, and therefore had a neutral impact on cash register receipts at service stations.
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Tags: Construction industry, consumer confidence, Economy, Retail sales
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Signs of Consumer Fatigue in U.S. and Canadian Retail Sales

Tuesday, May 28th, 2019

Article source: ConstructConnect

An ‘Overhang’ of Space in ‘Bricks and Mortar’ Retail

With jobs growth so strong and incomes rising, a main driving force behind the ten-year expansion in U.S. gross domestic product (GDP) has been consumer spending. Retail sales as a key component of consumer spending, however, have been taking quite a different path than in the past. Physical shopping outlets have been closing at a truly alarming rate, to be replaced by warehouses to fulfill purchases made over the Internet.

Signs of Consumer Fatigue in U.S. and Canadian Retail Sales Graphic

The construction industry welcomes the proliferation of distribution centers but laments the loss of ‘bricks and mortar’ retail building activity. Moreover, it’s not just the pullback in the square footage of retail space that is disappointing for construction. Just as big a problem is the ‘overhang’.

Vast amounts of empty space have been accumulating that will require years of gradually increasing occupancy to fill back up again.

U.S. Retail and Food Services Sales

When the 2008-09 recession was at its worst, U.S. total retail sales nosedived by nearly -13.0% year over year. As Graph 1 shows, U.S. retail sales then recovered in 2010 and 2011 to between +5% and +10% y/y. For the most recent seven-plus years, they’ve been mainly between 0% and +5%.

An often-quoted target for y/y ‘current dollar’ retail sales is +5%. After ‘normal’ inflation is factored out, +5% becomes +3% in ‘real’ terms, which provides healthy backing for GDP advancement.

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Tags: food services sales, nonstore retailers, Retail sales, vehiicle retail
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