Michigan retailers show continued optimism

Michigan retailers’ short-term sales projections remain steady for the third consecutive month, according to the Michigan Retail Index, a joint project of the Michigan Retailers Association (MRA) and Federal Reserve Bank of Chicago.

The March Index found that 67 percent of retailers believe their sales will increase for April–June over the same period last year, while 21 percent project as-good sales and 12 percent predict sales will decline. The results create a seasonally adjusted outlook index of 69.9, virtually unchanged from 70.2 in February and 69.1 in January.

The Index also found that 38 percent of retailers increased sales over March ’04, while 16 percent reported as-good sales and 46 percent recorded declines. The results create a seasonally adjusted performance index of 44.1, up from 40.8 in February but still below the 50.1 mark that would indicate positive overall activity for Michigan’s retail industry.

“While March numbers broke a string of four consecutive months of declining sales, the increase wasn’t enough to be able to call it a ‘good’ month for retail,” said Larry Meyer, MRA chairman and CEO.

“However, retailers’ level of optimism has remained steady for three months in a row. They’re looking forward to a better spring despite their struggles.”

Apparel stores rebounded in March and led the industry with 50 percent ringing up increased year-to-year sales.

Sales tax collections totaled $514.5 million in March, which was down 8.8 percent from last year’s level. The decline was largely due to the “weekend” factor. That is, when a month ends on a weekend, some sales tax collections spill over into the following month.

In 2004, February ended on a weekend, which helped to boost March tax collections. This year, February did not end on a weekend, so March collections did not receive any extra boost in collections. Excluding collections from motor vehicle transactions, sales tax receipts from all other taxable retail transactions were down 8.3 percent.

Sales tax collections are up 4.8 percent on a fiscal year-to-date basis.

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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