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Retail forecasts on the rise despite sluggish sales
LANSING — Michigan retailers’ outlook rose to its most optimistic level in more than nine years in May, following sluggish sales that didn’t keep pace with April’s post-winter surge, according to the Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
Retailers’ 90-day sales forecasts rose more than five points in May after shooting up by 11 points in April.
“We expected sales to keep rising in May after a strong rebound in April. Instead, they fell off,” said James P. Hallan, MRA president and CEO. “Retailers’ optimism continued rising anyway, likely because they know the economy is improving and consumers should be willing to spend.”
The May survey of MRA members showed 30 percent of retailers increased sales over the same month last year, while 46 percent recorded declines and 24 percent reported no change. The results create a seasonally adjusted performance index of 47.7, down from 51.1, in April. A year ago May the index stood at 54.9.
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, 63 percent of retailers expect sales during June-August to increase over the same period last year, while 8 percent project a decrease and 29 percent no change. That puts the seasonally adjusted outlook index at 79.3, up from 73.9 in April and the highest since November 2004. A year ago May the index stood at 76.6.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.