Retailers have solid expectations for 2012 sales
Coming off a positive 2011 and good holiday season, Michigan retailers are looking for an even stronger 2012. Ninety percent expect to increase annual sales, with most projecting increases of 5 percent or more, according to the latest Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
“Michigan retailers are optimistic,” said MRA President and CEO James P. Hallan. “They are looking at improvements in the economy and seeing that translate into better consumer spending and retail sales — a quarter of them believe their own sales will rise by double-digit percentages.”
The industry’s overall sales performance increased in January, setting a course for what retailers hope will be continued improvement throughout the year.
The Michigan Retail Index for January found that 48 percent of retailers increased sales over the same month last year, while 32 percent recorded declines and 20 percent saw no change. The results create a seasonally adjusted performance index of 63.8, up from 59.1 in December and 63.2 in November. It was the best showing since November 2010.
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, 57 percent of retailers expect sales during the February-April period to increase over the same period last year, while 9 percent project a decrease and 34 percent no change.
That puts the seasonally adjusted outlook index at 78.0, up from 71.8 in December and 75.8 in November.
Nationally, the U.S. Commerce Department said sales increased by 0.4 percent in January, but 0.7 percent excluding autos — the largest gain since last March.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago.