Michigan retailers forecast improved holiday sales
LANSING — Michigan retailers’ forecasts for holiday sales show cautious optimism, averaging a 1.3 percent gain over last year, according to the Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
Fifty-three percent expect to increase sales, 30 percent predict flat sales and 17 percent project sales will decline.
“Most retailers forecast better sales for the holidays, but their optimism is tempered by the great amount of economic uncertainty out there, largely because of the mess in Washington,” said James P. Hallan, MRA president and CEO.
“We were in the field with our survey during the federal government shutdown, the showdown over the debt ceiling and the flawed rollout of the government’s health reform website. All that uncertainty doesn’t sit well with consumers or businesses.”
Pre-shutdown projections by the National Retail Federation and International Council of Shopping Centers put U.S. holiday gains at 3.9 and 3 percent, respectively.
Meanwhile, the September Michigan Retail Index found that 40 percent of retailers increased sales over the same month last year, while 40 percent recorded declines and 20 percent saw no change. The results create a seasonally adjusted performance index of 52.8, the same as in August. A year ago September it was 54.0.
The MRI 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, 55 percent of retailers expect sales during October–December to increase over the same period last year, while 13 percent project a decrease and 32 percent no change. That puts the seasonally adjusted outlook index at 76.3, up from 70.3 in August. A year ago September it stood at 76.8.
The government shutdown has delayed national retail sales figures until Oct. 29.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.