SOURCE: Michigan Retailers Association

September 26, 2007 09:33 ET

Michigan Retailers Forecast Stronger Autumn

LANSING, MI--(Marketwire - September 26, 2007) - Heading into the fall season, Michigan retailers are the most optimistic they have been in nearly two years, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The improved forecasts come on the heels of the fourth consecutive month of generally positive performance by the state's overall retail industry.

"Most retailers are looking for improved sales to continue into the early holiday shopping season," said MRA Chairman and CEO Larry Meyer. "It's an encouraging sign and a reflection of better sales performance -- although many big economic challenges remain."

The Michigan Retail Index for August showed that 42 percent increased sales over the same month last year, while 36 percent recorded declines and 20 percent saw no change. The results create a seasonally adjusted performance index of 52.4, down from 55.3 in July but the fourth consecutive month the Index has stood above 50. It's the longest streak of 50+ readings since 2000.

Index values above 50 generally indicate an increase in activity for the overall industry, while values below 50 indicate a decrease.

Looking forward, 54 percent believe their sales will increase for September-November over the same period last year, while 18 percent believe their sales will decline and 24 percent expect no change. The results create a seasonally adjusted outlook index of 65.2, up from 59.6 in July and the highest reading since November 2005.

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers.

Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.

Michigan Retailers Association/Federal Reserve Bank of Chicago
Michigan Retail Index
August 2007 results
Index figures dating to July 1994 are available at
www.retailers.com/news/retailindex.html

August 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 July results)

              % Increased  % Decreased  % No Change  Index*      Responses
Sales        42 (46)      36 (32)      20 (13)       52.4 (55.3) 120 (101)
Inventory    31 (27)      24 (32)      40 (28)       46.8 (41.9) 116  (96)
Prices       29 (28)       6  (8)      59 (56)       59.5 (56.3) 115 (102)
Promotions   24 (28)       8  (7)      62 (54)       54.7 (55.9) 115  (98)
Hiring       12 (12)       7 (15)      77 (62)       50.5 (42.9) 118  (98)


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 July results)

              % Increased  % Decreased  % No Change  Index*      Responses
Sales        54 (49)      18 (20)      24 (20)       65.2 (59.6) 118  (98)
Inventory    38 (31)      22 (25)      32 (32)       52.5 (45.3) 113  (97)
Prices       32 (38)       7  (4)      53 (47)       59.2 (62.3) 113  (98)
Promotions   44 (38)       7  (7)      44 (45)       62.9 (59.9) 116  (99)
Hiring       15 (13)       9 (12)      70 (59)       49.8 (43.9) 115  (93)


August 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)

                % Increased     % Decreased     % No Change
North           35 (35)         55 (30)         10 (35)
West            53 (65)         26 (12)         21 (23)
Central         42 (58)         26 (15)         26 (21)
East            25 (50)         37 (37)         38 (13)
Southeast       43 (51)         38 (16)         16 (24)


Question of the Month
How does your Christmas ordering/buying compare with last year?
More 11.5%      Less 30.3%      Same 58.2%
Have you completed your Christmas ordering/buying?
Yes  28.1%      No 71.9%

*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.

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