LANSING – Michigan retail businesses project only a 1.4 percent increase in their own sales this year, following a poor holiday shopping season and a worse January, according to the Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.
The latest monthly Index survey found 58 percent expect their year-over-year sales to grow in 2014, while 19 percent expect sales to shrink and 23 expect no change.
Although 25 percent expect their sales to rise more than 5 percent, the average across the state is for 1.4 percent growth. Ten percent project a more than 5 percent drop.
Their predictions followed a slow January in which many retailers saw sales decrease.
“We’re still experiencing the adverse effects of a severe winter,” said James P. Hallan, MRA president and CEO. “January provided no respite from the subzero cold and snow that have chilled shopping, or from a still-sluggish economy that makes consumers more cautious.”
The January survey showed 30 percent of retailers increased sales over the same month last year, while 46 percent recorded declines and 24 percent reported no change. The results create a seasonally adjusted performance index of 42.5, down from 50.5 in December. A year ago January the index was at 57.9.
The 100-point Index gauges the performance of the state’s overall retail industry, based on monthly surveys conducted by MRA and the Federal Reserve. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Looking forward, 45 percent of retailers expect sales during February–April to increase over the same period last year, while 20 percent project a decrease and 35 percent no change. That puts the seasonally adjusted outlook index at 58.5, down from 63.3 in December. A year ago January it was 74.7.
Note: William Strauss, senior economist and economic advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.