Michigan retailers forecast slower start to ’07

Michigan retailers appear less optimistic about the start of the new year, despite a stronger start to the holiday shopping season, according to the latest Michigan Retail Index survey by the Michigan Retailers Association and Federal Reserve Bank of Chicago.

The sales performance component of the November index jumped nearly five points from last year and more than six points over October, indicating a solid beginning for holiday sales. But retailers’ sales outlook for the next three months dropped nearly seven points from a month earlier and more than 11 points from a year ago.

December’s Michigan Retail Index reporting on sales for the entire holiday season will be available January 24 on retailers.com. Retailers went into this season projecting, on average, a 4.5-pecent gain.

“It’s not surprising that retailers are tempering their outlook for the start of the new year, given economists’ predictions that Michigan’s economy will take longer to improve,” said MRA Chairman and CEO Larry Meyer.

The Index showed that 41 percent of retailers increased sales in November over the same month last year, while 43 percent recorded declines and 16 percent saw no change. The results create a seasonally adjusted performance index of 50.4, up from 44.2 in October.

In addition, 41 percent believe their sales will increase for December–February, while 34 percent forecast declines and 25 percent project no change. The results create a seasonally adjusted outlook index of 62.4, down from 69.3 in October.

Statewide, sales tax receipts dropped 6.7 percent in November to $519.3 million. The decline in sales tax collections in November occurred despite the fact that sales tax receipts from motor vehicle transactions increased 2.8 percent.

Sales tax collections from all other taxable retail sales dropped 7.6 percent in November.

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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