Utahns spent big in 2004

More spending equals more tax revenues, which means 2004 was a banner year for Utah.

After three years of near zero growth, total taxable sales in 2004 in the state climbed to $35.2 billion, up 8 percent from $32.6 billion in 2003, making 2004 the best growth year since 1996, according to estimates by the Utah State Tax Commission.

Taxable sales consist of final sales of most tangible, personal property in the state and include services like lodging rates, automobile leases, amusements and repairs to property.

Overall sales in 2004 translated to roughly $1.6 billion in state sales tax revenue and $528 million for local governments.

The percent increase in 2004's taxable sales mirrors the early 1990s, when increases of 8 percent to 12 percent were common.

Doug Macdonald, chief economist for the commission, said job gains and a booming construction sector helped jump-start taxable sales.

"Part of what's driving it is the pent-up demands in 2003 that weren't filled by business and somewhat by consumers," Macdonald said. "In the first half of 2003, there was a lack of business confidence because we were going into the Iraq War. When we came out of that, there was a spurt of purchasing that went on and has been going on since."

Strong job growth in professional and business services and defense-spending sectors, as well as the construction industry, were the main drivers in 2004, according to a state economic report released this week.

In fact, Utah's 2004 job growth, at 2.5 percent, was a "welcome contrast to 2003," the report said, "when Utah's economy was flat."

Retail sales, at $20.3 billion, made up 57 percent of overall taxable sales. Within the retail sector, residential construction values rose by 12 percent.

"Those are big things that are multiplying through the economy," Macdonald said, "as people build their houses, start to furnish them and then they do their landscaping."

Other areas of note in 2004:

• Building and garden store sales were up 26 percent.

• Lumber store sales were up 30 percent.

• Hardware store sales were up 18 percent.

• Furniture, home furnishing sales were up 10 percent.