May 23, 2001

Michigan retailers predict 'cool' summer despite gains

LANSING — Michigan retailers foresee a slow start to summer despite posting slightly better sales in April, the best in three months.

Thirty-seven (37) percent of retailers rang up increased sales in April compared to the same month a year ago, according to the Michigan Retail Index, a joint project of the Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago. That's up from 35 percent in March and 36 percent in February.

But retailers' projections for the next three months fell during April, indicating they don't believe they're out of the economic woods. Fifty-one (51) percent said they expect increased year-to-year sales for the May-July period - down from 61 percent in March and 55 percent in February.

"April's sales gains were welcome, but they weren't dramatic enough to push up retailers' optimism to more normal levels," said Larry Meyer, MRA's CEO and a former director of the Michigan Department of Commerce.

"There's a lot of uncertainty out there because of the different forces at work. Repeated interest rate reductions and prospective income tax cuts are being offset by rising energy prices and mixed economic news. It's going to take some time for things to settle out."

The central region of the state, from Jackson north to Mount Pleasant, was the only one where more retailers posted gains than declines during April, 40 percent to 30 percent, according to the Index. Statewide, furniture and appliance retailers led the industry, with 41 percent boosting sales and 36 percent experiencing decreases.

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers. MRA's more than 5,500 retail business members operate more than 12,000 stores across the state.

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
April 2001 results

April Activity
(numbers in parentheses indicate March results)

Expectations for Next 3 Months
(numbers in parentheses indicate March results)

April Sales Activity & Expectations for Next Three Months, by Region
(numbers in parentheses indicate expectations for next three months)