Michigan retailers forecast good start to new year

LANSING, MI--(Marketwired - December 21, 2016) - Michigan retailers are optimistic about the home stretch of holiday shopping and the first two months of the new year, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The three-month outlook component of the Index reached 83.5 (out of 100) in November, the highest monthly figure in 12 years.

"The Index shows the season got off to a good start in November and it appears to have remained positive going into the final days before Christmas," said MRA President and CEO James P. Hallan. "Retailers believe that a positive holiday season will provide momentum going into the new year."

Going into the season, 63 percent of MRA members projected their sales would increase over last year's, while only 9 percent expected them to slip. Their forecasts averaged +2.1 percent, up slightly over last year's projection of +2.0 percent.

The November Michigan Retail Index survey found 37 percent of Michigan retailers increased sales over the same month last year, while 36 percent recorded declines and 27 percent reported no change. The results create a seasonally adjusted performance index of 55.7, up from 49.8 in October. A year ago November the performance index stood at 50.2.

The 100-point index gauges the performance of the state's overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve Bank of Chicago's Detroit branch. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.

Looking forward, 52 percent of retailers expect sales during December-February to increase over the same period last year, while 18 percent project a decrease and 30 percent no change. That puts the seasonally adjusted outlook index at 83.5, up from 72.6 in October. A year ago November, the outlook index stood at 62.6.

Note: William Strauss, senior economist and economic advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.

Michigan Retail Index

November 2016 results

Previous Index figures are available at https://www.retailers.com/news-events/michigan-retail-index/

November Performance

Retailers reporting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same month a year ago

(numbers in parentheses indicate October results)

Outlook for Next 3 Months

Retailers expecting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same period a year ago

(numbers in parentheses indicate October results)

November Sales Performance & Outlook for Next 3 Months, by Region

(the first number indicates sales performance for the month; the number in parentheses indicates outlook for the next three months)

Question of the Month

Currently, what's your most significant cost driver?

*Seasonally adjusted diffusion index. A diffusion index, which is the sum of the percent of respondents indicating increase and half the percent indicating no change, is calculated and then seasonally adjusted using the U.S. Census Bureau's X-11 Seasonal Adjustment procedure. Index values above 50 generally indicate an increase in activity, while values below 50 indicate a decrease.