Michigan retailers forecast good start to new year
Michigan retailers are optimistic about the first two months of the new year, according to the Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
The three-month outlook component of the Index reached 83.5 (out of 100) in November, the highest monthly figure in 12 years.
“The Index shows the season got off to a good start in November, and it appears to have remained positive going into the final days before Christmas,” MRA President and CEO James P. Hallan said. “Retailers believe that a positive holiday season will provide momentum going into the new year.”
Going into the season, 63 percent of MRA members projected their sales would increase over last year’s, while only 9 percent expected them to slip. Their forecasts averaged plus 2.1 percent, up slightly over last year’s projection of plus 2.0 percent.
The November Michigan Retail Index survey found 37 percent of Michigan retailers increased sales over the same month last year, while 36 percent recorded declines and 27 percent reported no change. The results create a seasonally adjusted performance index of 55.7, up from 49.8 in October. A year ago in November, the performance index stood at 50.2.
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 Bank of Chicago’s Detroit branch. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Looking forward, 52 percent of retailers expect sales during December-February to increase over the same period last year, while 18 percent project a decrease and 30 percent no change. That puts the seasonally adjusted outlook index at 83.5, up from 72.6 in October. A year ago in November, the outlook index stood at 62.6.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.