Retailers’ holiday sales forecasts blend optimism, caution
LANSING — While Michigan retailers expect better holiday sales this year, their forecasts are a blend of optimism and caution, according to the Michigan Retail Index, a joint project of the Michigan Retailers Association and Federal Reserve Bank of Chicago.
While 63 percent project better holiday sales over last year, the average of all retailers’ projections comes to just 1.6 percent growth. Nearly a third (28 percent) expect their sales to increase more than 5 percent, and 35 percent anticipate their sales will rise 5 percent or less.
“Taken as a whole, these individual forecasts reflect the type of year Michigan’s retail industry has experienced: overall progress with a bumpy ride along the way,” said MRA President and CEO James P. Hallan.
“It’s no surprise to see retailers projecting better holiday sales, but showing restraint in their projections.”
Nationally, retail organization economists are forecasting holiday spending to increase about 4 percent.
The Michigan Retail Index found improved sales for September. The monthly survey of MRA members showed 53 percent of retailers increased sales over the same month last year, while 35 percent recorded declines and 12 percent reported no change. The results create a seasonally adjusted performance index of 62.1, up sharply from 46.0 in August. A year ago September, the Index stood at 52.8.
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, 60 percent of retailers expect sales during October-December to increase over the same period last year, while 18 percent project a decrease and 22 percent see no change. That puts the seasonally adjusted outlook index at 73.6, up from 70.6 in August. A year ago September, the index stood at 76.3.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.