Retail spending in Ohio this November and December is expected to increase by about $600 million over 2014, according to the University of Cincinnati Economics Center, in a report for the Ohio Council of Retail Merchants.
CLEVELAND, Ohio -- The good news is that retail spending in Ohio in November and December 2015 is expected to grow by 4.2 percent, or by about $600 million over 2014, surpassing the National Retail Federation's forecast of 3.7 percent this holiday season.
The bad news is that the Greater Cleveland area, which includes Lorain, Medina, Lake and Geauga counties, is expected to lag other regions of Ohio with growth of only 2.3 percent. That's according to researchers at the University of Cincinnati Economics Center in a report prepared for Focus On Ohio's Future, the public research arm of the Ohio Council of Retail Merchants.
That's less than half the 5.6 percent growth forecast for Cincinnati and the 4.6 percent growth projected for Columbus, the two strongest metropolitan areas identified in the report released on Monday.
That's in part because Cincinnati added 20,000 jobs between January and September, while Cleveland added only 4,000 during that same period.
This year's forecast is lower than last year's 4.5 percent projection but is still higher than last year's actual increase of about 4 percent, University of Cincinnati researchers said.
The sixth-annual study attributed Ohio's projected increase to stronger consumer confidence, lower prices, higher employment, lower debts, and higher wages.
Inflation has stayed around 2 percent since last year, housing prices have risen about 4 percent, and gas prices are down 25 percent compared to last year, boosting disposable income heading into the holidays, said Michael Jones, director of research at the University of Cincinnati Economics Center.
Ohio's employment rate of 4.4 percent in October is at its lowest point since 2006, and half a percentage point lower than the federal unemployment rate of 5.0 percent. With 5,441,000 employed residents, Ohio now ranks third in the nation in terms of numbers of jobs gained, after the more populous California and Florida, according to Labor Department data released Friday.
In addition, wages are up by about 3 percent, household debt levels remain stable, and the University of Michigan's consumer sentiment index, already consistently higher than it was this time last year, peaked at 98.1 percent in January, approaching where it was before the recession, Jones said.
"Relative to the previous year, total personal income of Ohioans has also increased by 3 percent," the report said. "With the increased capacity to purchase more goods and services, holiday sales should be higher in 2015 relative to 2014."
"As a daily barometer of America's economic vitality, Ohio's retailers are pleased to learn that Ohioans have the confidence and ability to continue their time-honored holiday gift-giving traditions," said Gordon M. Gough, president and chief executive of the Ohio Council of Retail Merchants, in a written statement.
"With gas prices 25 percent lower compared to last year's holiday season, consumers should have more disposable income to boost retail spending," Jones said. That's "in spite of new sales tax hikes in several key counties around Ohio, including three of Ohio's more populous counties: Hamilton, Lucas and Mahoning."
"Other positive national factors aiding retail growth include an improvement in consumer confidence compared to last year," Jones said.
Ohio's other major metropolitan areas are projected to grow as follows:
* Retail spending in Greater Akron is expected to grow 3.1 percent.
* Retail spending in Greater Dayton is expected to increase 3.3 percent.
* Retail spending in Greater Toledo is expected to grow 3.8 percent.
* Retail spending in the Youngstown area is expected to increase 3.6 percent.
The Focus on Ohio's Future, which conducted the research in support of Ohio's first state sales tax holiday on Aug. 7-9, said the exact figures on the impact of that holiday will be released soon. State officials are especially interested in seeing if Ohio's border communities benefited from out-of-state residents driving in to take advantage of tax-free shopping on back-to-school items.
The 10-page report concludes with a note about Amazon.com, which in May announced that it will create a third data-computing center in New Albany, outside Columbus, in addition to previously announced centers in Dublin and Hilliard, that will employ more than 1,000 people over the next several years.
With online shopping accounting for a larger share of consumer buying than ever before, "the loss of tax revenue from online purchases continues to be a source of concern for the State of Ohio."
"However, as of June 2015, Amazon began collecting sales tax from all customers in the state of Ohio ... collecting the same sales tax that Ohioans would have to pay to any other brick and mortar retailer," the University of Cincinnati said. "This event evens the playing field for many local store owners as their prices are now able to better compete against Amazon.
"As a result, many Ohioans who may have purchased a gift online to save money last year, will decide to purchase the same good at a physical store this holiday season. This should have a positive effect on holiday sales."