Sales tax collections in the Kingsport-Bristol Metropolitan Statistical Area (MSA) cooled from their February eye-popping year-over-year increase, but it didn’t give up the growth leader position for Northeast Tennessee. The only market metric where it declined was the March v. February market share.
March collections were down from February in all Northeast Tennessee metro areas and elsewhere in the state with the exception of the Nashville metro area.
Seasonally adjusted collections from the Tennessee Advisory Commission on Intergovernmental Relations and Middle Tennessee State University year-over-year collections were:
Kingsport-Bristol – up 7%
Knoxville – up 6.1%
Johnson City – up 2.8
Morristown – up 1.7%.
Statewide collections were up 10.8%, and the Chattanooga MSA had the highest increases, 15.5%, followed by Clarksville, 11.1%.
Here what the comparison to February’s collections looks like:
Kingsport-Bristol – down 11%
Knoxville – down 4.6%
Johnson City – down 4.5%
Morristown – down 2.5%
Nashville was the only metro area showing a month-over-month increase.
State collections were down 4.9%.
There wasn’t a correction to Kingsport-Bristol’s February 15.5% increase that led the region and the state. Collections that month were $19.5 million which stands as the all-time best month for the MSA. Since Q1 is typically a volatile period for consumer spending and collections the three-month performance is not always a good benchmark for what the year will be like. That comes with stabilization during Q2.
Nationwide consumer spending was up 0.4% in March. It was the best showing in three months. At the same time inflation increased as the fastest pace in more than a year. Durable goods were the primary driver of March’s consumer spending increase.
Locally the spending influencer to watch is the increase in gas prices. Consumers are paying almost 50 cents a gallon more than they were last year, so the fill-up price for a larger car, SUV or pickup is almost $40. Local consumer spending is especially sensitive to gas prices since wage growth here has not been as strong as it has in other areas.
Consumer spending is a key to economic growth since it accounts for 70% of economic activity.
So far this year collections in Northeast Tennessee are 2.9% higher than the first three months of last year:
Kingsport-Bristol – up 7%
Knoxville- up 2.8%
Morristown – up 1.4%
Johnson City – down 0.2%
Morristown was the only market that increased its regional market share of sales tax collections in March.
Knoxville had a 64.3% share, which was down 0.6% from February.
Kingsport-Bristol’s market share was 14.9% in Mach, down 0.8% from February.
Johnson City had a 13% share, unchanged from February.
Morristown’s share was 7.8%, up 0.4% from February.