The pervasive business shutdown prompted by COVID-19 hit Michigan retailers hard, as reflected in the Michigan Retail Index survey released last Friday.
The monthly survey, based on a 100-point range, asked Michigan retailers to gauge their March sales, hiring and inventory compared to the previous month. The index for sales came in at a dismal 11.6, compared to 66.6 in February. March 2019's number was 42.6.
The seasonally adjusted performance index, conducted by Michigan Retailers Association (MRA) in cooperation with the Federal Reserve Bank of Chicago's Detroit branch, provides a snapshot of the state's overall retail industry. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Martin Lavelle, business economist at the Federal Reserve Bank of Chicago, said the sales and hiring numbers are the lowest in Michigan Retail Index history. The hiring index was only 15.2, compared to 51.4 in February 2020 and 52.5 in March 2019. Seventy-one percent of retailers expect decreased hiring for the next three months.
The March survey shows that 87% of respondents reported sales declines over February. Only 9% recorded increases and 4% reported no change.
The Index also asks retailers to project their sales for the next three months. Retailers, who for the past few years have been optimistic about projected sales, weren't this time around. Seventy-four percent expect decreased sales through June, while 20% predict an increase; 6% expect no change. That results in an adjusted outlook index of 21.3, also the lowest in Index history.
"We're working with the Governor and legislators on a plan to re-open Michigan's economy," said William Hallan, president and CEO of Michigan Retailers Association. "We believe stores can re-open and sell merchandise without endangering the safety of their staff or customers, whether it's through online orders or curbside delivery. If we wait too long, many stores simply will not survive."
Sales tax receipts in March decreased 1.5% over March 2019 and were $60.6 million below the forecasted level.
Michigan's unemployment rate preliminarily rose to 4.1% from February 2020's 3.6%. The number doesn't show the full impact of the pandemic, which has prompted more than 1 million Michiganders to file for unemployment. Last year, Michigan's unemployment rate was 4.3%. In March 2020, the national rate came in at 4.4%.
Published: Mon, Apr 27, 2020
