Growth to continue through 2022, just at a slower pace

If inflation slows, retail sales in Alabama should continue to grow through the end of the year, but at a much lower rate than the past two years.

Last year, taxed sales grew a whopping 17% in Alabama. Like the rest of the nation, Alabamians elevated their spending in 2021. Alabama consumers bought a record $17 billion in last two months of the year. The overall taxed sales growth rate for all of 2020 was 7.13%.

In the first six months of 2022, growth of taxed sales reached almost 7% (6.93%), based on the Alabama Revenue Department abstracts.

Ongoing supply chain issues, the war in Ukraine, coronavirus concerns and other issues continue to impact the economy and prices. Declining fuel prices, the Federal Reserve’s efforts to slow inflation and unemployment being at an all-time low could keep a recession at bay.

While Alabama retail sales continued to grow in the second quarter of the year, the growth rate did slow slightly.

In the first quarter of 2022, Alabama saw nearly an 8% growth in taxed sales. Astonishingly, taxed sales in Alabama in March grew almost 2% over the record-shattering amount collected by retailers and other businesses in March of 2021. Last March, Alabama saw a 42% increase in taxed sales over what was sold in 2020. The growth in April of 2021 was 39%. Those unprecedented growth rates came one year after the coronavirus shutdowns.

Every month since May 2020 has seen growth over the same month in the previous year,  Nineteen of those months saw double-digit growth. Growth in 2022 has hovered near the 6% to 8% range, about half the 2021 rate. The National Retail Federation continues to project 6% to 8% retail sales growth in 2022. Prior to 2019, Alabama’s retail sales had been growing at a rate of 2% to 4%.

 

Source: Alabama Department of Revenue monthly abstracts

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A version of this article appeared on Page 3 of the July 2022 Alabama Retailer