Market Overview

Retail sales solid for 2018, despite slight June dip

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LANSING, Mich., July 25, 2018 (GLOBE NEWSWIRE) -- Forty-three percent of respondents in a monthly retail survey said their 2018 sales are up from what they projected at the year's beginning, while 36 percent said they were down, and 20 percent are holding steady.

"That shows retailers in Michigan are having a solid year so far," said James P. Hallan, President and CEO of Michigan Retailers Association, which conducts the monthly Retail Index survey in cooperation with the Federal Reserve Bank of Chicago's Detroit branch.

In June, 49 percent of respondents reported sales increases over May, the survey showed. Forty-three percent of retailers recorded declines in June and 8 percent reported no change.

The results create a seasonally adjusted performance index of 46.1, down from the 61.4 performance index reported in May, one of the stronger sales months of the year so far. A year ago, the Retail Index was 60.1.

"We're crossing our fingers that back-to-school sales, which typically start in late July, will be a big boost for stores for the next couple months," Hallan said.

The 100-point index 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.

The Retail Index shows that 62 percent of Michigan retailers expect strong sales through September, while 6 percent predict a decrease and 32 percent expect no change. That results in an adjusted outlook index to 74.9 – a good sign for a strong finish to summer, according to the Retail Index survey.

Michigan's economy remains steady and strong. The jobless rate fell half a percentage point from May to June, standing at 4.5 percent. The national rate is 4 percent. A year ago in Michigan, it was 4.4 percent.

According to the Senate Fiscal Agency, June 2018 sales tax receipts increased 4 percent from June 2017 and were $19.5 million above the forecasted level. Fiscal year-to-date sales tax collections through June 2018 were up 1.9% from fiscal year 2016-17 and $8.4 million above the forecasted level.

Note: William Strauss, senior economist and economic advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.

Michigan Retail Index
June 2018 results

June performance      
Retailers reporting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to last month (numbers in parentheses indicate May results). Survey respondents: 60.

  % Increased % Decreased % No Change Index*
Sales 49   (61) 43    (27) 8      (12) 46.1    (61.4)
Inventory 32   (41) 29    (13) 39    (46) 46.9    (56.0)
Prices 15   (22) 5        (2) 80    (76) 53.0    (59.1)
Promotions 18   (26) 2        (5) 80    (69) 59.2    (59.3)
Hiring 17   (24) 8      (10) 75    (66) 49.7    (52.8)

Outlook for the next three months
Retailers expecting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to last month (numbers in parentheses indicate May results)

  % Increased % Decreased % No Change Index*
Sales 62     (58) 6     (12) 32    (30) 74.9   (69.2)
Inventory 30     (38) 25   (17) 45    (45) 53.7   (58.7)
Prices 20     (25) 5       (4) 75    (71) 59.3   (60.2)
Promotions 28     (33) 2       (1) 70    (66) 66.0   (67.1)
Hiring 16     (17) 12     (5) 72    (78) 52.1   (54.5)

June sales performance and outlook for the next three months, by region
(The first number indicates sales performance for the month; the number in parentheses indicates outlook for the next three months)     

  % Increased % Decreased % No Change
North 75      (84) 17     (8) 8        (8)
West 58      (42) 25     (8) 17    (50)
Central 43      (57) 57     (0) 0      (43)
East 50      (25) 50   (25) 0      (50)
Southeast 25      (70) 65     (5) 10    (25)

*Seasonally adjusted diffusion index. A diffusion index, which is the sum of the percent of respondents indicating increase and half the percent indicating no change, is calculated and then seasonally adjusted using the U.S. Census Bureau's X-11 Seasonal Adjustment procedure. Index values above 50 generally indicate an increase in activity, while values below 50 indicate a decrease.

Contact: Meegan Holland
517.721.9009/mholland@retailers.com

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