Michigan Retailers' Sales and Forecasts Slip

Marketwired

LANSING, MI--(Marketwire - Mar 27, 2013) - Michigan retailers' forecasts for spring sales slipped, following a drop in their February sales, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

February's sales index number dropped below 50 for the second time in three months, showing that consumers were still adjusting to higher payroll taxes, continued high unemployment and rising gasoline prices.

"February's fall-off in sales puts Michigan's retail industry back on a bumpy road," said MRA President and CEO James P. Hallan. "January gave us a solid jump from a disappointing December, but February returned to December's level."

Most retailers maintained a positive projection for spring sales, but the industry's overall short-term outlook took a hit in February, falling more than seven points on the index.

The February Michigan Retail Index found that 37 percent of retailers increased sales over the same month last year, while 43 percent recorded declines and 20 percent saw no change. The results create a seasonally adjusted performance index of 46.8, down from 57.9 in January and the lowest February since 2009. A year ago February it was 59.3.

The 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, 59 percent of retailers expect sales during March - May to increase over the same period last year, while 8 percent project a decrease and 33 percent no change. That puts the seasonally adjusted outlook index at 67.3, down from 74.7 in January. A year ago February it stood at 67.9.

The U.S. Commerce Department reported that national sales in February increased 1.1 percent - 0.7 percent not including autos, gas stations and restaurants.

Note: William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.

Michigan Retail Index
February 2013 results
Index figures dating to July 1994 are available at http://www.retailers.com/mra/news/michigan-retail-index.html

February Performance
Retailers reporting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same month a year ago
(numbers in parentheses indicate January results)

                     
    % Increased   % Decreased   % No Change   Index*   Responses
Sales   37 (43)   43 (35)   20 (22)   46.8 (57.9)   99 (78)
Inventory   30 (22)   23 (29)   47 (49)   58.4 (57.4)   98 (77)
Prices   26 (17)   5 (10)   69 (73)   59.9 (54.7)   98 (77)
Promotions   38 (22)   5 (4)   57 (74)   65.1 (62.6)   98 (77)
Hiring   17 (9)   10 (11)   73 (80)   54.2 (51.2)   99 (76)
                     

Outlook for Next 3 Months
Retailers expecting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same period a year ago
(numbers in parentheses indicate January results)

                     
    % Increased   % Decreased   % No Change   Index*   Responses
Sales   59 (55)   8 (5)   33 (40)   67.3 (74.7)   99 (78)
Inventory   39 (30)   15 (13)   46 (57)   54.5 (57.9)   98 (77)
Prices   26 (27)   4 (5)   70 (68)   59.9 (62.4)   98 (77)
Promotions   52 (44)   4 (4)   44 (52)   71.2 (71.2)   95 (77)
Hiring   22 (13)   9 (6)   69 (81)   55.3 (54.3)   98 (75)
                     

February Sales Performance & Outlook for Next 3 Months, by Region
(the first number indicates sales performance for the month; the number in parentheses indicates outlook for the next three months) 

             
    % Increased   % Decreased   % No Change
North   35 (45)   45 (10)   20 (45)
West   32 (77)   50 (5)   18 (18)
Central   33 (67)   22 (0)   45 (33)
East   50 (25)   50 (25)   0 (50)
Southeast   39 (55)   45 (10)   16 (35)
             

*Seasonally adjusted diffusion index. A diffusion index, which is the sum of the percent of respondents indicating increase and half the percent indicating no change, is calculated and then seasonally adjusted using the U.S. Census Bureau's X-11 Seasonal Adjustment procedure. Index values above 50 generally indicate an increase in activity, while values below 50 indicate a decrease.

Contact:

Tom Scott
517.372.5656
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