Business spending paving way for retail jump, observers say

The recent recession caused Grand Valley residents to curtail some of their buying of big-ticket items over the past few years, but local officials are starting to see some encouraging trends in sales, particularly from businesses.

Though sale tax collections from such things as motor vehicles are down more than 20 percent over the past four years, business-to-business buying is up, especially for oil-and-gas-extraction companies, according to Grand Junction sales and use tax figures for the third quarter of 2011.

The figures show business buying is up 34 percent for the first three quarters of 2011 compared with the same quarters in 2010, and it is up 16 percent compared with the first three quarters of 2008. The extraction companies, meanwhile, had a 17 percent year-over-year increase in sales, and a 26 percent jump over four years ago.

That shows a positive trend that local tax and economic development experts say will translate into more buying by consumers.

“Businesses are making investments, though it’s not necessarily translating into a lot of jobs yet,” said Jodi Romero, financial operations manager for the city. “We’re definitely working our way back up, there’s no doubt about that.”

Gross retail sales are up nearly 13 percent locally in the past two years, nearly double the national average, her figures show. That’s great news considering it was down 23 percent just two Decembers ago, Romero said.

“When other areas around the state were growing by 6, maybe 7 percent (in the mid-2000s), we were growing by 17 percent,” Romero said. “The three years prior to 2008, we had double-digit growth. Even in 2008, we ended the year with an 8 percent growth in sales and use tax revenues. We had a high place to fall from, and when we fell, we fell big.”

Kelly Flenniken, executive director of the Grand Junction Economic Partnership, agreed the trend points to an increase in consumer — and business — confidence, which means more sales for local businesses and, eventually, more jobs for area residents.

“You can tie those back to median income,” she said. “When that goes up, even if it goes up a little bit, that drives the spending in these other (sales) categories, too. If we have a little bit more money, even if it’s a sliver, we generally spend a little bit more money, and a lot of what we spend goes towards those secondary businesses — retail, restaurants, beauty salons — those kind of things.”



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