LANSING, Mich. – Retailers in Michigan had momentum going into February, according to the Michigan Retail Index survey. But the survey – which also asks about retailers’ optimism for sales in the next three months – was taken before the COVID-19 crisis hit Michigan.
Consequently, the results are far rosier than the reality since the coronavirus has closed businesses and sent unemployment claims soaring.
For February, the Retail Index survey came in at a healthy 66.6, a large bounce up from February 2019’s 42.8, and a slight drop from January 2020’s strong 72.5. The seasonally adjusted performance index is conducted by Michigan Retailers Association (MRA) in cooperation with the Federal Reserve Bank of Chicago’s Detroit branch.
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 February survey showed that 48% of respondents reported sales increases over January. Thirty-one percent of retailers recorded declines and 21% reported no change.
The Retail Index shows that 60% of Michigan retailers expect increased sales through May, while 21% predict a decrease; 19% expect no change. That results in an adjusted outlook index of 62.1.
“We’re glad that retailers had a strong January and February before this pandemic spread to Michigan,” said William Hallan, President and CEO of Michigan Retailers Association. “Many of those same businesses are now closed temporarily, and really struggling. But retailers are resilient, and many will come back stronger.”
Hallan said retailers are in uncharted territory. “We won’t know for a while how the pandemic will affect retailers and the entire economy,” Hallan said.
Sales tax receipts in February increased 11% over February 2019 and were $37.6 million above the forecasted level. Fiscal year-to-date sales tax collections through February were up 7.0% from last year and $71.8 million above the forecasted level.
Michigan’s unemployment rate has yet to be announced for February 2020. In January 2020, the rate was 3.8%. In February, the national rate came in at 3.5%.
Note: William Strauss, senior economist and economic advisor with the Federal Reserve Bank of Chicago, can be reached at 312.322.8151.
