It may still feel like a recession out there, but the key indicators keep telling us things are getting better. Retail executives, for instance, see big improvements in store for their industry.

According to the National Retail Federation's latest Executive Opinion Survey, a monthly poll taken by the NRF and the Bank of Tokyo Mitsubishi Ltd., the Retail Sector Performance Index (RSPI) for July rose to its highest level since the survey 's inception in September 2002. And that doesn't appear to be just a blip in the trend line: The July Demand Outlook Index, a six-month outlook for sales, also projected growth. The RSPI is based on retail executives' evaluations of monthly sales, customer traffic, the average transaction per customer, employment, inventories and expectations for sales six months out.

"The retail industry is finally showing some momentum and it couldn't have come at a better time," says NRF President and CEO Tracy Mullin. "With the back-to-school season upon us and tax rebate checks reaching consumers, it appears there's good reason for optimism."

" Retailers feel that the industry is on the mend,"says Michael Niemira, senior retail analyst at the Bank of Tokyo Mitsubishi Ltd. "Sales have been on a steady increase over the past few weeks. We expect to see this trend continue."

In an open-ended question, CEOs were asked to list factors that could affect the retail industry positively or negatively in the months ahead. Though a majority of the responses centered on the economy, a few CEOs cited North Korea and domestic terrorism as risks to the retail industry.