"The arrival next month of millions of dollars in federal income tax rebates is, no doubt, fueling the short-term optimism," said James P. Hallan, MRA president and CEO. "It's a small but welcome shot in the arm for an industry and an economy struggling in the face of higher gasoline prices, home foreclosures and other economic problems."

The February Index survey had found that most retailers believe the "economic stimulus" checks will be of modest help to their businesses.

For March, the Index showed 28 percent of retailers increased sales over the same month last year, while 54 percent recorded declines and 18 percent saw no change. The results create a seasonally adjusted performance index of 35.6, down from 42.2 in February and the lowest for any month since February 2003. A year ago March, the index was at 49.0.

Looking ahead, 54 percent believe their sales will increase for April-June, while 25 percent forecast declines and 21 percent project no change. The results create a seasonally adjusted outlook index of 59.6, the highest since last October. A year ago March, the index was at 57.1.

The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers.

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

March 2008 results
Index figures dating to July 1994 are available at www.retailers.com/news/retailindex.html

March Performance
Retailers reporting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same month a year ago (numbers in parentheses indicate February results)

             % Increased  % Decreased  % No Change    Index*      Responses
Sales               28 (29)      54 (49)      18 (22)     35.6 (42.2)      114 (126)
Inventory         28 (22)      32 (42)      40 (36)     44.6 (41.4)      113 (127)
Prices              52 (53)        8  (9)       40 (38)     72.2 (70.3)      113 (127)
Promotions      35 (32)      11 (14)       54 (54)     61.8 (60.2)      114 (127)
Hiring               7  (6)       20 (22)       73 (72)     43.3 (43.2)      112 (126)

Outlook for Next 3 Months
Retailers expecting increased, decreased or unchanged sales, inventory, prices, promotions and hiring compared to the same period a year ago (numbers in parentheses indicate February results)

             % Increased  % Decreased  % No Change    Index*      Responses
Sales              54 (39)      25 (33)       21 (28)         59.6 (50.0)   113 (126)
Inventory        27 (28)      33 (33)       40 (39)         43.9 (41.3)   113 (126)
Prices             46 (43)       4  (8)         50 (49)         67.4 (65.2)   112 (166)
Promotions     44 (46)       5  (6)         51 (48)         67.7 (68.0)   111 (125)
Hiring             13  (9)      13 (17)        74 (74)         47.7 (45.0)   113 (126)

March Sales Performance & Outlook for Next 3 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             24 (36)       44 (44)      32 (20)
West             27 (50)       65 (19)       8 (31)
Central          44 (78)       56 (11)       0 (11)
East              21 (50)       36 (21)      43 (29)
Southeast      24 (59)       63 (24)      13 (17)

*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.