Consumer Spending - September 2008
State tax revenue reports indicate that taxable retail sales in August (reflecting retail activity in July) remained sluggish and below year-earlier levels across much of the District. Weakness was most pronounced in Georgia, and only Mississippi and Louisiana experienced an increase in revenue from a year earlier.
According to our informal survey of District retailers, August sales were disappointing. Retailers anticipate that sales over the next several months will be flat to slightly down on a year-over-year basis.
Vehicle sales in the Southeast weakened further in July and August. District new vehicle registrations dipped 21 percent from a year earlier while national registrations were down 15 percent on a three-month moving average basis ending in July. District registrations were mostly affected by declining truck and SUV sales. For August, contacts from leading distributors reported sales declines across all models except subcompact vehicles.
Sales of District-assembled vehicles through August were down 15 percent from 2007 levels compared to a decline of 11 percent nationally. All 25 vehicle models assembled in the District posted declines. Weak demand for full-sized trucks and SUVs has prompted several companies to cut production and hours to work off high inventories.
Tourism in the District remained strong through August. International airlines added flights and increased capacity at Orlando International Airport, and passenger arrivals at Louis Armstrong International Airport in New Orleans increased 13 percent in June 2008 compared to a year earlier. In Mississippi, gaming revenues were $112.1 million in August, a 3 percent increase on a year-over-year basis. However, various parts of the District reported discounting. Hotels reportedly offered specials and slashed rates to offset higher airfares. For the first time in several years, cruise lines offered specials and discounted rates.
Overall, tourism activity is expected to remain strong through the end of the year. In November, New Orleans plans to host a contemporary international art exhibition in addition to other major corporate and association conventions.