SOURCE: Michigan Retailers Association

March 26, 2008 10:10 ET

Michigan Retailers Say Tax Rebates Will Be Some Help

LANSING, MI--(Marketwire - March 26, 2008) - Most Michigan retailers believe the federal government's plan to mail "economic stimulus" checks to taxpayers this spring will be of modest help to their businesses.

The monthly Michigan Retail Index survey, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago, found that 53.2 percent expect it will provide some help and another 2.4 percent believe it will be a lot of help, while 44.4 percent say it won't help at all.

"Although a small majority of retailers believe the tax rebates will provide some help, they don't see them as the solution to current economic problems," said James P. Hallan, MRA president and CEO. "They're looking for modest sales growth in the latter half of the year, not the next few months."

For February, the Index showed 29 percent of retailers increased sales over the same month last year, while 49 percent recorded declines and 22 percent saw no change. The results create a seasonally adjusted performance index of 42.2, down from 47.5 in January. A year ago February, the index was at 46.9.

Looking ahead, 39 percent believe their sales will increase for March-May, while 33 percent forecast declines and 28 percent project no change. The results create a seasonally adjusted outlook index of 50.0, down from 53.4 in January. A year ago February, the index was at 57.7.

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 2008 results

Index figures dating to July 1994 are available at www.retailers.com/news/retailindex.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       29 (37)      49 (46)      22 (17)      42.2 (47.5)  126 (116)
Inventory   22 (20)      42 (36)      36 (44)      41.4 (49.0)  127 (116)
Prices      53 (44)       9 ( 9)      38 (47)      70.3 (67.4)  127 (116)
Promotions  32 (29)      14 ( 7)      54 (64)      60.2 (64.8)  127 (115)
Hiring      6  ( 2)      22 (26)      72 (72)      43.2 (38.4)  126 (116)

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        39 (42)      33 (34)      28 (24)      50.0 (53.4)  126 (116)
Inventory    28 (27)      33 (36)      39 (37)      41.3 (43.0)  126 (115)
Prices       43 (38)       8 ( 6)      49 (56)      65.2 (67.4)  166 (116)
Promotions   46 (46)       6 ( 5)      48 (49)      68.0 (68.8)  125 (115)
Hiring        9 ( 4)      17 (19)      74 (77)      45.0 (41.5)  126 (116)

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       24 (24)      59 (52)      17 (24)
West        29 (41)      50 (26)      21 (33)
Central     22 (48)      48 (30)      30 (22)
East        44 (30)      11 (30)      45 (40)
Southeast   38 (48)      48 (28)      14 (24)

Question of the Month

How much help do you think the federal "economic stimulus package" will be to your business?

No Help        Some Help        A Lot of Help
 44.4%           53.2%               2.4%

*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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