SOURCE: Michigan Retailers Association

Michigan Retailers Association

May 23, 2012 14:09 ET

Michigan Retailers: Retail Sales Slow, but Outlook Remains Positive

LANSING, MI--(Marketwire - May 23, 2012) - Sales slowed across Michigan's retail industry in April, but retailers' forecasts for summer remain strong, according to the latest Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The 100-point Index, which measures the overall performance of the state's retail industry, dipped five points in April to 52.6, the lowest since last June. Retailers' outlook for the first half of summer grew slightly, to 69.2.

"It appears the warm-weather boost in sales that retailers enjoyed in the First Quarter took away from April's sales," said MRA President and CEO James P. Hallan. "Retail sales remained positive in April, but did not grow as fast as they did the first three months of this year or most of the second half of last year."

"It's also noteworthy that retailers' level of optimism remains solid going into the first half of summer. They expected the slowdown to be short lived," Hallan added.

The Michigan Retail Index for April found that 45 percent of retailers increased sales over the same month last year, while 33 percent recorded declines and 22 percent saw no change. The results create a seasonally adjusted performance index of 52.6, down from 57.8 in March. A year ago April it was 53.1.

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

Looking forward, 61 percent of retailers expect sales during May-July to increase over the same period last year, while 10 percent project a decrease and 29 percent no change. That puts the seasonally adjusted outlook index at 69.2, up from 69.0 in March. A year ago April it was 60.9.

National retail sales slowed in April, rising only 0.1 percent, according to the U.S. Commerce Department.

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
April 2012 results
Index figures dating to July 1994 are available at http://www.retailers.com/mra/news/michigan-retail-index.html

April 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 March results)

% Increased % Decreased % No Change Index* Responses
Sales 45 (49) 33 (26) 22 (25) 52.6 (57.8) 104 (105)
Inventory 38 (25) 21 (21) 41 (54) 53.2 (50.5) 102 (104)
Prices 31 (28) 3 ( 7) 66 (65) 63.4 (61.5) 101 (104)
Promotions 35 (22) 6 ( 4) 59 (74) 63.9 (60.3) 103 (103)
Hiring 16 ( 9) 7 ( 4) 77 (87) 51.7 (50.9) 102 (102)

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 March results)

% Increased % Decreased % No Change Index* Responses
Sales 61 (59) 10 ( 8) 29 (33) 69.2 (69.0) 103 (105)
Inventory 39 (37) 24 (16) 37 (47) 52.1 (53.7) 102 (103)
Prices 28 (22) 5 ( 9) 67 (69) 61.7 (56.0) 102 (103)
Promotions 40 (39) 5 ( 2) 55 (59) 66.5 (67.2) 101 (103)
Hiring 14 (15) 5 ( 3) 81 (82) 53.2 (53.0) 100 (101)

April 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 53 (53) 16 (10) 31 (37)
West 48 (65) 43 ( 4) 9 (31)
Central 46 (70) 36 (10) 18 (20)
East 56 (56) 22 (22) 22 (22)
Southeast 41 (68) 41 (12) 18 (20)

*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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