As we approach the middle of the year, we are happy to report that Georgia’s retail industry is strong and expanding. The state continues to add jobs at a healthy rate and, in fact, posted the third-highest gain in payrolls in the United States recently, with 13,600 jobs added in March.
That’s good news for retailers. It means consumers are beginning to loosen up their pocketbooks and spend more. Because consumer spending accounts for well over two-thirds of our gross domestic product, our overall economic growth depends on a good outlook for consumer spending.
Because of our city’s position as a logistics hub and corporate headquarters location, Atlanta benefits from the growth in national and international economies as well. From the Georgia Retail Association office at AmericasMart Atlanta downtown, you can literally see the retail industry’s energy. Attendance continues to grow at the 2013 AmericasMart Atlanta shows. Retailers from every U.S. state and more than 90 countries buy consumer goods in large volume, according to representatives from AmericasMart Atlanta, host of the nation’s largest gift and home furnishings markets.
Auto sales and housing are two of the biggest drivers of retail’s comeback. An increase in job security means families are much more willing to make big-ticket purchases. The continuing decline in unemployment is certainly partly responsible for the comeback of Georgia shoppers. Home values are also increasing as excess housing inventory declines. When home values recover, families not only have more to spend, they are more willing to spend.
The impact of the housing market also ripples throughout retail. When people move, they will usually take the opportunity to upgrade their appliances, televisions, furniture, linens and everything else you need to furnish a home. That trend leads to an increase in customer traffic for virtually every major retailer, including home improvement retailers and electronics, furniture, department and discount stores.
We think the increase in consumer spending will continue and possibly accelerate as we continue through the year. In June and July, most families start to look ahead to the new school year, so back-to-school shopping will bring a lot of people out to the stores. By that time, we expect most consumers will have fully absorbed and adjusted to the expiration of the payroll tax cut this year, which reduced household budgets somewhat.
Unsteady gas prices have had an impact on household budgets this year as well, which can cut into discretionary income. However, the long-term trend in gas prices has been down. It appears that continuing increases in domestic energy production will keep prices under control for the foreseeable future.
The retail supply chain depends heavily on Atlanta and the Port of Savannah as a logistics hub, so the growth in the retail industry nationally has a very big local impact on our region. As we look forward to the rest of the year, I’m happy to report that the forecast is for growth.
Rick McAllister is president of the Georgia Retail Association.