Retailers’ short-term optimism is rising with the temperatures
LANSING — Michigan retailers welcomed a long-awaited rise in sales during April with a burst of optimism about sales for the rest of spring and early summer, according to the Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
Their 90-day sales forecasts shot up nearly 11 points, the biggest month-to-month jump since January 2013. April also marked the first month since October that more retailers reported year-over-year sales increases than decreases.
“The end of the seemingly endless winter was the tonic that consumers and retailers needed,” said James P. Hallan, MRA president and CEO. “Sales rose along with the temperatures and boosted retailers’ outlook for the immediate future.”
In fact, when retailers were asked to choose the factor “most responsible” for poor sales during the previous three months, 55 percent pointed to the weather, while 25 percent chose “low consumer confidence.”
The April survey of MRA members showed 43 percent of retailers increased sales over the same month last year, while 37 percent recorded declines and 20 percent reported no change. The results create a seasonally adjusted performance index of 51.1, up from 44.8 in March. A year ago April the index stood at 54.
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. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Looking forward, 65 percent of retailers expect sales during May-July to increase over the same period last year, while 10 percent project a decrease and 25 percent no change. That puts the seasonally adjusted outlook index at 73.9, up from 63.3 in March. A year ago April the index stood at 68.1.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.