Comerica Bank’s Michigan Index Flattens as Auto Production Stabilizes
DETROIT — Comerica Bank’s Michigan Economic Activity Index fell 0.7 percent in March to a level of 127.2 from 127.9 in February.
The index consists of eight variables: 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.
“Our Michigan Economic Activity Index dipped slightly in March and remains range bound since late last year,” said Comerica chief economist Robert Dye. “Jobs are still being added to the Michigan economy, but the state’s important manufacturing sector is facing three challenges. First, demand for manufactured goods from the oil and gas industry has collapsed. Second, the relatively strong dollar and tepid global demand are headwinds for export oriented manufacturing. Third, the auto sector increasingly looks like it is at the top of its cycle and will not significantly increase production from here. Supporting the Michigan Index in March were payroll employment, house prices, auto production and sales tax receipts. Drags in the index in March came from exports, initial claims for unemployment insurance, housing starts, and hotel occupancy.”
The index remains 53 points, or 72 percent, above the index cyclical low of 74.0, hit at the bottom of the last recession. The index averaged 124.3 points for all of 2015, seven points above the index average for 2014.