For Immediate Release

June 28, 2006

LANSING — Michigan retailers have cooled their summer outlook despite posting the best May sales numbers in four years. The better May numbers, however, were still not good enough to shake Michigan’s retail industry out of its slump.

Retailers’ sales forecasts for the next three months slipped 2.5 points on May’s Michigan Retail Index, a survey project of the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago. Meanwhile, May’s sales performance jumped 5 points on the Index—but remained below the 50 mark and in negative territory for 18 of the past 20 months.

“May’s stronger sales were helpful, but certainly not enough to ease the serious concerns businesses have about Michigan’s economy,” said MRA Chairman and CEO Larry Meyer. “Our economy and our retailers continue to struggle.”

The Index found that 39 percent of retailers increased sales in May over the same month last year while 42 percent recorded declines and 19 percent saw no change. The results create a seasonally adjusted performance index of 47.4, up from 42.4 in April and 42.0 in March. It was the best May since 2002, when the Index stood at 51.3. An Index number below 50 generally indicates decreased activity for the industry as a whole.

In addition, 50 percent believe their sales will increase for June–August, while 22 percent forecast declines and 28 percent project no change. The results create a seasonally adjusted outlook index of 61.5, down from 64 in April and 63.2 in March.

In no region of the state did a majority of retailers report better year-to-year sales. Statewide, jewelers fared the best, with 47 percent reporting sales gains and 35 percent reporting declines.

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.