Michigan followed the national trend, with a tiny dip in retail sales in February, according to the latest Michigan Retail Index, a joint project of Michigan Retailers Association (MRA) and the Federal Reserve Bank of Chicago’s Detroit branch.
The Michigan Retail Index’s February survey found that 37 percent of respondents reported sales increases over January, 53 percent recorded declines and 10 percent reported no change. The results create a seasonally adjusted performance index of 42.2, a slight decrease from the 42.5 performance index reported in January. A year ago, the Retail Index was 52.
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.
Nationally, retail sales also fell 0.1 percent in February. It’s the third straight month for slight declines in sales, signaling that consumer spending is slowing this quarter after a hot fourth quarter that saw sales increase at a 3.8 percent annualized pace, according to Commerce Department figures.
“Weaker numbers after a strong fourth quarter aren’t unusual,” said Jim Hallan, MRA President and CEO. “The job market is strong, property values are rising and taxes are lower. Wages are growing slowly, but consumer sentiment is still strong.”
Hallan said it’s no surprise that February category leaders in Michigan were jewelry, personal services and automotive service stores. “Valentines Day and potholes can account for that,” he said.
All expectation indicators are strong, as stores gear up for spring.
The Retail Index shows that 80 percent of Michigan retailers expect strong sales through May, while nine percent predict a decrease and 10 percent expect no change. That raises the seasonally adjusted outlook index to 75.8 – a sign of big optimism for a busy spring, according to the Retail Index survey.
February 2018 sales tax receipts, at $484.8 million, increased 1.7 percent from February 2017 and were $5.5 million above the forecasted level.
The state’s jobless rate rose a tenth of a point last month to 4.8 percent, the same as a year ago. The national unemployment rate was 4.1 percent in February.
While the National Retail Federation expects retailers to experience huge benefits from the recent tax reform, Michigan retailers are taking a wait-and-see attitude, according to the survey. Forty-nine percent said the reform wouldn’t affect their business, while 43 percent said it would benefit them. Eight percent believed it would cost them.
For those who do realize savings, 47 percent said they’d pay down debt; 27 percent would save the money; 13 percent would take on capital projects and 13 percent would pay employees more.
