SOURCE: Michigan Retailers Association

Michigan Retailers Association

March 16, 2016 16:06 ET

Michigan Retailers' Sales and Forecasts Rise

LANSING, MI--(Marketwired - March 16, 2016) -  Michigan retailers boosted their three-month sales forecasts after posting improved sales in February, according to the latest Michigan Retail Index survey, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The survey found 92 percent project their sales will improve (68 percent) or be as good as (24 percent) the same period last year. That figure rose from 85 percent in January.

In addition, 66 percent of retail businesses reported February sales were better (44 percent) or as good as (22 percent) the same month a year ago. That rose from 54 percent.

"February's performance ended a two-month decline and provided some positive momentum for the spring season," said MRA President and CEO James P. Hallan. "Economic conditions -- including the state unemployment rate dropping below 5 percent -- remain strong and encourage consumers to make purchases more freely."

Across the U.S., core retail sales rose 0.2 percent in February, according to the U.S. Commerce Department. But overall sales, which include autos and gasoline, dipped 0.1 percent and January's 0.2 percent increase was revised to a 0.4 percent decrease. 

The February Index survey found 44 percent of Michigan retailers increased sales over the same month last year, while 34 percent recorded declines and 22 percent reported no change. The results create a seasonally adjusted performance index of 58.7, up from 47.1 in January. A year ago February the performance index stood at 41.7.

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, 68 percent of retailers expect sales during March-May to increase over the same period last year, while 8 percent project a decrease and 24 percent no change.

That puts the seasonally adjusted outlook index at 75.2, up from 70.5 in January. A year ago February, the outlook index stood at 78.5.

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
February 2016 results
Index figures dating to July 1994 are available at http://www.retailers.com/mra/news/michigan-retail-index.html

February 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 January results)

           
  % Increased % Decreased % No Change Index* Responses
Sales 44 (36) 34 (46) 22 (18) 58.7 (47.1) 68 (67)
Inventory 24 (24) 31 (31) 45 (45) 51.4 (53.5) 67 (67)
Prices 7 (8) 13 (16) 80 (76) 46.6 (46.7) 68 (67)
Promotions 19 (18) 3 (6) 78 (76) 56.5 (61.0) 68 (67)
Hiring 7 (10) 6 (21) 87 (69) 50.6 (46.4) 67 (67)
           

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 January results)

           
  % Increased % Decreased % No Change Index* Responses
Sales 68 (62) 8 (15) 24 (23) 75.2 (70.5) 66 (66)
Inventory 50 (42) 12 (23) 38 (35) 60.5 (58.7) 66 (65)
Prices 17 (17) 6 (14) 77 (69) 53.4 (50.8) 66 (65)
Promotions 54 (52) 2 (3) 44 (45) 72.8 (73.3) 68 (66)
Hiring 28 (24) 3 (6) 69 (70) 60.0 (57.1) 68 (67)
           

February 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 64 (73) 0 (9) 36 (18)
West 35 (65) 39 (13) 26 (22)
Central 56 (75) 22 (0) 22 (25)
East 100 (50) 0 (0) 0 (50)
Southeast 38 (75) 57 (5) 5 (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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