DETROIT — Comerica Bank’s Michigan Economic Activity Index fell in September, down 0.9 percentage points to a level of 128.1.
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.
Comerica economist Robert Dye blamed a slowdown in housing starts in the region, along with lower auto production and state tax revenues.
“A reset in housing starts in late summer, after surging earlier in the year, was a persistent weight on the Michigan Index through the third quarter,” Dye said. “In September, only three out of eight index components were positive. They were nonfarm payrolls, state exports and hotel occupancy.”
Meanwhile, he said, claims for unemployment insurance rose, while housing starts, house prices, auto production and state sales tax revenues all declined.
“We look for only modest momentum in the Michigan economy through early next year as auto production starts to ease in the state,” Dye said. “Most major auto makers expect slight declines in U.S. auto sales through 2017, and small car production is being shifted out of the state, so manufacturing employment is expected to be a drag on the state economy next year.”
September’s reading is 54 points, or 73 percent, above the index cyclical low of 74.1, reached at the bottom of the last recession in 2007-09. The index averaged 123.6 points for all of 2015, five and four-fifths points above the index average for 2014. August’s index reading was 129.0.