Michigan retailers forecast stronger autumn

Heading into the fall season, Michigan retailers are the most optimistic they have been in nearly two years, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The improved forecasts come on the heels of the fourth consecutive month of generally positive performance by the state’s overall retail industry.

“Most retailers are looking for improved sales to continue into the early holiday shopping season,” said MRA Chairman and CEO Larry Meyer. “It’s an encouraging sign and a reflection of better sales performance—although many big economic challenges remain.”

The Michigan Retail Index for August showed that 42 percent increased sales over the same month last year, while 36 percent recorded declines and 20 percent saw no change. The results create a seasonally adjusted performance index of 52.4, down from 55.3 in July but the fourth consecutive month the Index has stood above 50. It’s the longest streak of 50+ readings since 2000.

Index values above 50 generally indicate an increase in activity for the overall industry, while values below 50 indicate a decrease.

Looking forward, 54 percent believe their sales will increase for September–November over the same period last year, while 18 percent believe their sales will decline and 24 percent expect no change. The results create a seasonally adjusted outlook index of 65.2, up from 59.6 in July and the highest reading since November 2005.

Sales tax receipts totaled $575.8 million in August, up 1.2 percent from last year’s level. This marked only the fourth time in the 2006-07 fiscal year that monthly sales tax collections topped the year-ago level.

Despite the increase in August, fiscal year-to-date tax collections remain below last year’s level by 1.4 percent, representing a decline that is slightly greater than the 1.1 percent decline expected for all of FY 2006-07.

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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