For Immediate Release

June 22, 2005

LANSING — Michigan retailers’ short-term forecasts are up slightly following a small gain in sales for the overall industry during May. But the gain wasn’t enough to break the string of subpar months—now at seven—for most retailers.

According to the Michigan Retail Index, a joint project of the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago, 59 percent of retailers believe their sales will increase for June–August over the same period last year, while 28 percent expect as-good sales and 13 percent predict sales will decline. The results create a seasonally adjusted outlook index of 69.4, up from 67.1 in April.

The Index also found that 39 percent of retailers increased sales over May ’04, while 15 percent reported as-good sales and 46 percent recorded declines. The results create a seasonally adjusted performance index of 45.9, up from 41.6 in April but the seventh consecutive month below the 50.0 mark.

Index numbers below 50.0 indicate an overall decrease in retail activity.

"The small gain in sales performance during May led to a slight uptick in optimism,” said Larry Meyer, MRA chairman and CEO. “But Michigan’s retail industry continues to struggle. October 2004 was the last time a majority of retailers posted improved year-to-year sales.”

Apparel retailers and furniture and appliance stores led the industry in May, with 50 percent of stores in those trade lines ringing up higher sales than a year ago. Apparel retailers are also the most upbeat, with 73 percent projecting better summer sales.

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.

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