Michigan retailers notice slight improvement

More Michigan retailers reported improved sales in June, the second month in a row of better industry performance.

Although the overall improvement was slight, it marked the first time in more than a year that the industry has put together back-to-back monthly increases, according to the Michigan Retail Index, a joint project of the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago.

“Michigan’s retail industry continues to struggle, but at least the arrows are beginning to point in the right direction,” said Larry Meyer, MRA chairman and CEO. “It’s good to see a glimmer of momentum heading into the back-to-school season.”

The Index, based on monthly surveys of MRA members, found that 45 percent of retailers increased sales in June over the same month last year while 43 percent recorded declines and 12 percent saw no change. The results create a seasonally adjusted performance index of 47.1, up from 45.9 in May and 41.6 in April.

However, it was the eighth consecutive month below the 50.0 mark. Index numbers below 50.0 indicate an overall decrease in retail activity.

The Index also found a small drop in projections for the 3rd Quarter.

Fifty-seven percent believe their sales will increase for July–September, while 16 percent forecast declines and 27 percent project no change. The results create a seasonally adjusted outlook index of 67.7, down from 69.4 in May.

Northern and southeast Michigan retailers led the state in sales performance in June.

Sales tax collections totaled $583.9 million in June, down 6.6 percent from the year-ago level. The decline is due to collection timing issues and continued weakness in motor vehicle sales tax collections.

Due to the “weekend effect,” sales tax collections were higher in May 2005 and in June 2004 and lower in April 2005 and May 2004, accounting in part for seemingly large fluctuations from month to month and from year to year.

Complete results of this month’s Michigan Retail Index—including data on sales, inventory, prices, promotions and hiring—are available at www.retailers.com/news/retailindex.html. The website includes figures dating back to July 1994.

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