Retail sales, forecasts up significantly

Michigan retailers' sales and forecasts rose in February, surging past last winter's weak numbers, according to the latest Michigan Retail Index survey, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago.

The sales Index topped 50 (on a scale of 0-100) for the first time since August 2007, indicating positive activity throughout the retail industry.

Also snapped was a 27-month string in which the number of retailers reporting year-over-year decreases surpassed those reporting increases.

Similarly, retailers' level of optimism, as reflected in their three-month sales projections, increased to its highest level since February 2006.

"These numbers are good news for the retail industry and the overall economy," said MRA President and CEO James P. Hallan.

"They are even more encouraging because sales growth was spread across the industry, from furniture stores to gift, jewelry and apparel retailers.

"Looking forward, we expect the positive trend to continue," Hallan said. "Retailers posted some of their weakest numbers of the recession last March, April and May."

The Michigan Retail Index survey for February found that 46 percent of retailers increased sales over the same month last year, while 39 percent recorded declines and 15 percent saw no change.

The results create a seasonally adjusted performance index of 56.7, up from 49.9 in January. A year ago, the index was 40.8 in February.

Index values above 50 generally indicate an increase in positive activity, while values below 50 indicate a decrease.

Looking ahead, 61 percent of retailers expect sales during March - May to improve over the same period last year, while 16 percent project a decrease and 23 percent no change.

That puts the seasonally adjusted outlook index at 70.7, up from 61.8 in January. A year ago the index was 44.6 in February.

William Strauss, Senior Economist and Economic Advisor with the Federal Reserve Bank of Chicago, can be reached at 312-322-8151.

Published: Thu, Apr 8, 2010