County’s Sales Gain Lags State’s
Retail sales growth in Orange County fell behind the statewide average during the April-June period--the first time in at least a decade that the county has trailed the state in back-to-back quarters.
In the second quarter, retail sales grew 5.2% from the previous year compared to the state figure of 6%. Those figures mark only the third quarter since 1981 that the county has failed to outperform the state.
In the first quarter, the dollar value of taxable retail sales in the county increased 6.2% from the first 3 months of 1987, while the statewide increase was 6.9%, according to the State Board of Equalization, which prepares the figures.
Still, the county’s second-quarter retail sales of $6.3 billion represent a hefty slice of California’s total of $61.9 billion and do not suggest an ailing economy in the county, said Jeff Reynolds, the Board of Equalization’s research chief.
“Northern California has been lagging behind but perked up in the last few quarters,” Reynolds said. “So what we are seeing is just that Northern California is catching up” and causing most of the increase in the statewide average.
“For a long time Orange County was just growing and growing,” he said. “But the more you grow, the bigger the retail base becomes, until it becomes difficult to sustain the same percentage of growth.
“That’s what has happened in Orange County, compared with a Riverside or San Bernardino, where it takes far less real sales to get a bigger percentage of increase each year.”
Fewer Luxuries Bought
A detailed report on first-quarter retail sales released last week showed that most of the sluggishness in Orange County came from flat or even declining sales of luxury and discretionary items, like luggage, books, jewelry, liquor and some types of apparel.
Similar details of second-quarter spending patterns will not be available for a month or more.
If second-quarter spending matches the first, said economist Phillip E. Vincent, “then one thing we can say is that incomes have not been keeping pace with increases in prices, and that puts a damper on spending for discretionary items.”
Vincent, an economist with First Interstate Bank, said Orange County has passed its major growth period and now has “a maturing economy.”
“That isn’t bad, it is only slowing down relative to places that are growing really fast, like Riverside and San Bernardino,” he said.
The bank’s forecast for Orange County sales this year, Vincent said, “is that California’s tax sales growth will be 7.4% and Orange County’s will be 6.9%.”
Stephen Levy, director of the private Center for the Continuing Study of the California Economy in Palo Alto, said Orange County’s economy continues to be one of the healthiest in the state. The apparent slowing of retail sales activity “is not because of income, jobs, population or housing, so it must be because of some peculiarity of the area, like a slowdown in the number of new stores opening up,” he said.
“I would expect Orange County to remain at or near the state average,” Levy said.
SECOND QUARTER RETAIL SALES GROWTH
How Orange County retail sales growth compares to growth in other Southern California counties and the state. Figures show percentage increase in 1988 second quarter, compared to 1987 second quarter. Kern County 10.7% Riverside County 10.6% San Bernardino County 8.7% Ventura County 7.2% San Diego County 6.8% Orange County 5.2% Los Angeles County 4.3% Santa Barbara County 3.6% SOUTHERN CALIFORNIA 5.6% STATEWIDE 6.0%
Source: State Board of Equalization
