Comerica Michigan Business Index Stalls

DETROIT — Comerica Bank’s Michigan Economic Activity Index was flat in September, maintaining a level of 127.5, the same as in August.

“Our Michigan Economic Activity Index was unchanged in September, after growing for the previous five months,” said Comerica chief economist Robert Dye. “Four of the components of the index saw declines: nonfarm payrolls, exports, housing starts and house prices. U.S. vehicles sales were robust at an 18.2 million unit sales rate for September and October. The UAW has reached agreements with all Big Three auto manufacturers, allowing for more manufacturing flexibility. We expect auto sector employment to crest in Michigan by early 2016 and then gradually recede. The strong U.S. dollar is a contributing factor to the announced shift in production of small cars to Mexico. Automakers will keep the production of higher-cost, higher-margin vehicles stateside.”

The Michigan Economic Activity Index consists of eight variables, as follows: nonfarm payrolls, exports, hotel occupancy rates, continuing claims for unemployment insurance, housing starts, sales tax revenues, home prices, and auto production. All data are seasonally adjusted, and indexed to a base year of 2008. Nominal values have been converted to constant dollar values. Index levels are expressed in terms of three-month moving averages.

September’s reading was 53 points, or 72 percent, above the index cyclical low of 74, which was reached at the bottom of the 2007-09 recession.

The index averaged 117.4 points for all of 2014, three and three-tenths points above the index average for 2013.

To subscribe to Comerica economic publications, contact ComericaEcon@comerica.com. Archives of Comerica economic reports are available at http://www.comerica.com/economics.

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