Michigan retailers are forecasting a positive holiday season, with their sales rising by an average of 2.1 percent over last year, according to the Michigan Retail Index, a joint project of Michigan Retailers Association and the Federal Reserve Bank of Chicago.
“Nearly two-thirds of Michigan retailers expect to increase their holiday sales over last year,” MRA President and CEO James P. Hallan said. “They’re looking at a stronger consumer amid positive economic conditions, such as reduced unemployment and lower gasoline prices.”
Sixty-three percent expect to increase sales, with 21 percent expecting increases of more than 5 percent. Only 9 percent expect their sales to fall below last year.
The retailers’ forecasts are in line with national projections. The National Retail Federation predicts total sales to increase 3.6 percent and the International Council of Shopping Centers projects a 3.3-percent bump. Michigan is expected to ring up nearly $20 billion of the nation’s estimated $656 billion in holiday sales.
Hallan noted retail sales rebounded in Michigan and across the U.S. in September. National retail sales, excluding autos and gasoline, rose 0.3 percent in September over August, according to the U.S. Commerce Department.
The September Michigan Retail Index survey found 45 percent of Michigan retailers increased sales over the same month last year, while 32 percent recorded declines and 23 percent reported no change. The results create a seasonally adjusted performance index of 56.9, up from 50.8 in August. A year ago in September, the performance index stood at 51.1.
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 Bank of Chicago’s Detroit branch. Index values above 50 generally indicate positive activity; the higher the number, the stronger the activity.
Looking forward, 54 percent of retailers expect sales during October-December to increase over the same period last year, while 17 percent project a decrease and 29 percent foresee no change. That puts the seasonally adjusted outlook index at 65.5, down from 71.6 in August. A year ago in September, the outlook index stood at 75.4.
William Strauss is senior economist and economic advisor with the Federal Reserve Bank of Chicago. He can be reached at (312) 322-8151.