Comerica Bank’s Michigan Index Ticks Up

DETROIT — Comerica Bank’s Michigan Economic Activity Index improved 0.8 percentage points in March to a level of 130.4 from 129.6 in February.

The index consists of eight variables: nonfarm payrolls, exports, hotel occupancy rates, continuing claims for unemployment insurance, housing starts, sales tax revenues, house prices, and auto production. All data are seasonally adjusted, and indexed to a base year of 2008, with all values converted to constant dollars. Index levels are expressed in terms of three-month moving averages.

“The Comerica Bank Michigan Economic Activity Index increased modestly in March after declining in February,” Comerica chief economist Robert Dye said. “We believe that the Michigan Index will continue to show a modest upward trajectory for the remainder of this year, but growth in the Michigan economy will likely be inconsistent. We have not seen three consecutive monthly gains in the Michigan Index since the summer of 2015. In March, six out of eight index components were positive, including nonfarm payrolls, state exports, unemployment insurance claims, house prices, sales tax revenue and hotel occupancy. The housing starts and auto production sub-indexes both eased in March. We look for flat auto production this year as sales ease a bit after last year’s record pace. House prices in Detroit gained 7 percent in March over the previous year.”

March’s reading is 56 points, or 76 percent, above the index cyclical low of 74.1, reached at the bottom of the 2007-09 recession.

The index averaged 127.8 points for all of 2016, four and one-fifth points above the index average for 2015.

To subscribe to Comerica publications or for questions, contact ComericaEcon@comerica.com. Archives are available at http://www.comerica.com/economics.

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