The retail sector here is expected to remain robust in 2006, though it will be challenged to match this years stellar performance.


Spokane County and the cities of Spokane and Spokane Valley have budgeted for sales tax revenue increases of 4 percent, 1.7 percent, and 2 percent, respectively, for the coming year after seeing much stronger growth so far this year.


Marshall Farnell, the countys chief executive officer, says he considers the countys 4 percent forecast for next year to be conservative since the countys sales tax receipts are up close to 9 percent to date this year, which he describes as pretty much of an all-time high growth rate.


Gavin Cooley, the city of Spokanes chief financial officer, says his 1.7 percent estimate also is conservative, given the possibility that factors such as rising energy prices and softening construction markets could dampen retail sales.


At the moment, though, there is little sign of any cooling. Through September, the city of Spokanes sales tax revenues were up 4.7 percent, which Cooley called a pretty remarkable number, and he says the last four months have been the strongest.


The city of Spokane Valley is too young to be able to be able to compare year-to-year data, but its finance director, Ken Thompson, says, The last six months have been real good. I know its up dramatically over last year.


Randy Barcus, chief economist for Spokane-based Avista Corp., told the Journal recently that he expects fourth-quarter sales here to be the highest ever, which he attributed partly to strong employment growth.


Bob Smith, general manager of River Park Square in downtown Spokane, says, River Park Squares had a great year, and I dont see any reason for it to stop. I think I can say that Im very optimistic about whats going to happen in 2006.


Retail development and leasing activity here also has been strong this year and is expected to remain so next year, commercial real estate specialists say.


Marshall Clark, of Spokanes Clark Pacific Real Estate Co., which is heavily involved in that market, says, This is the best year weve ever had, by far. Were seeing good activity. Were leasing up a lot of space. He expects 2006 to be an excellent year as well.


Clark predicts retail vacancy rates here will fall next year as rising interest rates cause more tenants to lease space rather than buy buildings, and he says retail leasing activity is expected to climb about 8 percent nationally.


Jan Teague, president and CEO of the Washington Retail Association, says, I think its going to be a solid year. I think its going to track the strength of this year, and be even better.


Referring specifically to Spokane, she says, The influx of new retail jobs is a significant contributor to the stability of the (low) unemployment rate despite losses in manufacturing work.