SOURCE: Michigan Retailers Association

August 24, 2007 08:53 ET

Michigan Retailers Maintain Positive Momentum

LANSING, MI--(Marketwire - August 24, 2007) - Michigan's retail industry is showing signs of new life.

According to July's Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago, the overall industry posted its first three-month period of positive sales performance since early 2004.

"Although July is not a key month for retailing, we are encouraged to see sales activity in positive territory for the third month in a row," said Larry Meyer, MRA chairman and CEO. "We haven't experienced a 'three-peat' on the Index in three years, and the improved performance appears to be widespread."

The Michigan Retail Index for July showed that 46 percent increased sales over the same month last year, while 32 percent recorded declines and 13 percent saw no change. The results create a seasonally adjusted performance index of 55.3, up from 52.1 in June and 54.1 in May. It was also the best month since April 2004.

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

Retailers remain cautiously optimistic in their short-term sales forecasts.

Looking forward, 49 percent believe their sales will increase for August-October over the same period last year, while 20 percent believe their sales will decline and 20 percent expect no change. The results create a seasonally adjusted outlook index of 59.6, down from 60.9 in June but still the second-best month of the year.

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
July 2007 results
Index figures dating to July 1994 are available at
www.retailers.com/news/retailindex.html


July 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 June results)

            % Increased  % Decreased  % No Change  Index*       Responses
Sales       46 (45)      32 (32)      13 (23)      55.3 (52.1)  101 (136)
Inventory   27 (31)      32 (23)      28 (43)      41.9 (51.3)   96 (133)
Prices      28 (31)       8  (5)      56 (60)      56.3 (61.9)  102 (131)
Promotions  28 (28)       7  (6)      54 (63)      55.9 (60.4)   98 (133)
Hiring      12 (14)      15 (10)      62 (73)      42.9 (49.9)   98 (132)


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 June results)

            % Increased  % Decreased  % No Change  Index*       Responses
Sales       49 (50)      20 (22)      20 (25)      59.6 (60.9)   98 (133)
Inventory   31 (31)      25 (29)      32 (37)      45.3 (46.8)   97 (133)
Prices      38 (32)       4  (7)      47 (57)      62.3 (61.7)   98 (131)
Promotions  38 (37)       7  (6)      45 (54)      59.9 (63.7)   99 (132)
Hiring      13 (12)      12  (9)      59 (73)      43.9 (48.0)   93 (129)


July 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           44 (25)         37 (25)         19 (43)
West            50 (55)         30 (25)         10 (10)
Central         45 (65)         30 (10)         20 (20)
East            17 (33)         50 (17)         33 (50)
Southeast       53 (55)         32 (25)         10 (12)

*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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