State’s retailers maintain positive momentum

Michigan’s retail industry is showing signs of new life.

According to July’s Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago, the overall industry posted its first three-month period of positive sales performance since early 2004.

“Although July is not a key month for retailing, we are encouraged to see sales activity in positive territory for the third month in a row,” said Larry Meyer, MRA chairman and CEO. “We haven’t experienced a ‘three-peat’ on the Index in three years, and the improved performance appears to be widespread.”

The Michigan Retail Index for July showed that 46 percent increased sales over the same month last year, while 32 percent recorded declines and 13 percent saw no change. The results create a seasonally adjusted performance index of 55.3, up from 52.1 in June and 54.1 in May. It was also the best month since April 2004.

Index values above 50 generally indicate an increase in activity for the overall industry, while values below 50 indicate a decrease.

Retailers remain cautiously optimistic in their short-term sales forecasts.

Looking forward, 49 percent believe their sales will increase for August–October over the same period last year, while 20 percent believe their sales will decline and 20 percent expect no change. The results create a seasonally adjusted outlook index of 59.6, down from 60.9 in June but still the second-best month of the year.

Sales tax revenue totaled $631.9 million in July, representing an increase of 7.7 percent from last year’s level. A large increase was expected in July because June ended on a weekend, which caused some sales tax collections to spill over into July.

Excluding motor vehicle sales, sales tax receipts from all other taxable retail transactions totaled $564.4 million and were 10.5 percent above the 2006 level. Despite the strong increase in July, sales tax collections so far in FY 2006-07 continue to trail last year’s level by 1.7 percent.

Complete results of this month’s Michigan Retail Index—including data on sales, inventory, prices, promotions and hiring—are available at www.retailers.com/news/retailindex.html. The website includes figures dating back to July 1994.

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