For Immediate Release
March 23, 2005

LANSING— How to describe Michigan's retail industry? Try this: more are upbeat about the future, more are being beaten up in the present.

For the second month in a row, more Michigan retailers expect better sales in the short term while seeing actual sales decline, according to the Michigan Retail Index, a joint project of the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago.

The February Index found that 62 percent of retailers believe their sales will increase for March-May over the same period last year, while 27 percent project as-good sales and 11 percent predict sales will decline. The results create a seasonally adjusted outlook index of 70.2, up from 69.1 in January.

At the same time, only 35 percent of retailers increased sales over February '04, while 13 percent reported as-good sales and 52 percent recorded declines. The results create a seasonally adjusted performance index of 40.8, down from 44.4 in January.

February marked the fourth consecutive month the industry's sales-performance index has fallen, and the eighth time in the past 10 months the index has been below the 50.0 mark. An index reading above 50 indicates overall positive sales activity for the industry.

"Most Michigan retailers continue to struggle as our state's economy continues to lag behind those of other states and gasoline prices and interest rates rise," said Larry Meyer, MRA chairman and CEO. "Despite those conditions, retailers' level of optimism remains relatively healthy. It has been a long winter, and retailers are looking forward to a good spring."

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers.

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