Michigan retailers reported a strong start to 2020.
A monthly activity index compiled by the Michigan Retailers Association and the Federal Reserve Bank of Chicago’s Detroit branch registered 72.5 for January. That’s a sizable increase from the 42.1 a year earlier and is attributed to the weather and high consumer confidence. January’s reading also came as an improvement over the 60.0 for December.
“It’s great to start the year on a positive note,” said William Hallan, president and CEO of Michigan Retailers Association.
“It’s partly due to the fact that we’ve seen a mild winter so far in 2020. Last year, retailers were dealing with the polar vortex, which shut down many businesses across the state for days at a time,” Hallan said. “It’s higher than this time last year, when the uncertainty of tariffs and a government shutdown affected sales numbers.”
In the monthly survey by the MRA, 44 percent of responding retailers reported January sales increases over December and 38 percent said their sales declined. The remaining 18 percent reported no change.
More than seven out of 10 survey respondents expect increased sales through April, and 13 percent expect a decrease. The MRA said that resulted in an adjusted outlook index of 73.1, which is “a solid indication for a successful spring.”
The outlook comes as the state’s economy faces what Comerica Inc. calls “subdued growth” through 2020.
“We expect ongoing modest growth for the Michigan economy in 2020. Year-over-year job growth was subdued in late 2019, at around 0.4 percent. We expect weak job growth in 2020 to be enough to keep the state’s unemployment rate very low, averaging 3.7 percent this year,” Comerica economists wrote in an updated economic outlook for Michigan issued Feb. 13.
The outlook projects 0.8 percent Real GDP growth this year for Michigan, which compares to 0.5 percent for all of 2019 that was dragged down by a 0.3 percent GDP decline in the fourth quarter as a result of the six-week General Motors strike.
Comerica expects auto sales to ease from 17.0 million in 2019 to 16.7 million this year.