Retail spending will see a 3.1 percent growth across 2016, the National Retail Federation reports.
America’s largest retail group said in its annual economic forecast that employment gains and increasing consumer confidence were slowly helping to steer the U.S. economy back into growth.
As a result of that improving economic climate, researchers reckon spending in 2016 will outpace the retail industry’s ten-year average of 2.7 percent.
This year’s growth will be led by America’s rapidly expanding digital retail market. Non-store sales are expected to enjoy a noticeable spike in the coming months, settling somewhere between six and nine percent. This subcategory includes sales made online, via mobile devices and by catalog.
National Retail Federation Reports More Spending Likely
Retailers can also expect to see a boost in sales this year thanks to rock-bottom oil prices. Although consumers have been enjoying major savings at the pump since late 2014, a low level of confidence in the US economy pushed consumers to sit on that extra pocket money rather than release it back into the retail market.
As a result, retail activity across 2015 turned out to be lackluster at best. The National Retail Federation had initially predicted spending to increase by 4.1 percent at the start of 2015 — but the group later downgraded their forecast to 3.5 percent.
According to Matthew Shay, President and CEO of the National Retail Federation, 2016 should be different.
“Wage stagnation is easing, jobs are being created and consumer confidence remains steady, so despite the headwinds our economy faces from international developments — particularly in China — we think 2016 will be favorable for growth in the retail industry,” Shay said. “All of the experts agree that the consumer is in the driver’s seat and steering our economic recovery.”
In addition to a positive sales outlook for 2016, the National Retail Federation is anticipating the US economy as a whole to post growth of up to 2.4 percent. The group also expects to see employment gains of some 190,000 per month, bringing unemployment down by approximately 4.6 percent.
As a result of improving job prospects, researchers said that small businesses can expect to see more consumer spending in 2016. But this rise will stem from job growth rather than increasing wages.
Despite these promising forecasts for 2016, Shay warned that retail growth will depend entirely upon the US government’s ability to leave the retail sector free to go about its business.
“The best thing the government can do is stay out of the way, stop proposing rules and regulations that create hurdles toward greater capital investment and focus on policies that help retailers provide increased income and job stability for their employees,” he said.
Image: National Retail Federation