After two years of almost 10 percent taxable sales growth, Utah's economic boom cooled off in 1997, according to new figures from the Utah State Tax Commission.
The commission reported Wednesday that the state's taxable sales rate grew about 3.8 percent in 1997, compared to growth of 9.5 percent in 1996 and 9.7 percent in 1995. Last year's growth rate is the lowest the state has seen since 1987, when the rate was -1.5 percent.After four straight years of double-digit growth, taxable business investment rose only 2.8 percent in 1997, the commission said. And taxable services ended a six-year string of double-digit gains with a 3.6 percent increase last year.
However, the reports said, preliminary fourth quarter 1997 data showed almost 5 percent growth in taxable sales and purchases in Utah.
"Despite strong wage growth and consumer confidence, falling residential construction coupled with high consumer debt levels combined to form a fourth-quarter 1997 taxable sales gain of 4.8 percent," the commission said.
It said Utah's retail trade growth of 3.2 percent for the Christmas quarter was 3 percent below forecasts. And the quarter's retail sales growth did not keep up with the national rate of 3.6 percent.
Still, the commission said, food store sales were a bright spot in the quarter, increasing at a 6.8 percent rate.
Business investment rose 3.9 percent in 1997's fourth quarter, as the I-15 rebuilding project helped boost the construction sector. And taxable services increased almost 7 percent.
"After adjusting for 1.5 percent inflation during the quarter, real taxable sales and purchases . . . increased 4 percent in the fourth quarter," the commission said. "This continues a recent slower growth mode compared to the rapid gains over the last five years."
The commission's report forecasts an increase of 8.4 percent in total gross taxable sales this year, and a strong January started moving the state in that direction.
January 1998 taxable retail sales and business purchases of $1.62 billion for large, monthly sales taxpayers increased 5.4 percent compared to a year ago, the commission said.
"In addition to the economy, another factor contributed to this gain: 11,514 outlets reported in January 1998 compared to 9,096 in January 1997, a 27 percent increase," it said.
"Retail trade, the largest major sector with sales of $894 million, rose only 2.5 percent from January 1997, almost identical to national retail trade sales growth, which rose 2.4 percent."
However, the commission said, taxable business equipment and utility sales increased 8 percent to $497 million in January, and taxable services jumped 15 percent over 1997 levels to $199 million.
It said falling housing starts contributed to a 4 percent decline in building and garden sales and 1 percent drop in furniture sales.
Along the Wasatch Front, January sales rose about 7 percent in Salt Lake County, 10 percent in Utah County and 8 percent in Davis County. They probably fell about 2 percent in Weber County, the commission said.