Comerica Bank's Michigan Index Drops

October 31, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index fell again in August to a level of 118.1. August’s reading is 20 points, or 21 percent, above the index cyclical low of 97.9. The index averaged 118.2 points for all of 2017, one point above the index average for 2016. July’s index reading was 118.4.

Comerica Bank’s Michigan Economic Activity Index fell for the third consecutive month in August. This is the first three-month drop for the Michigan Index since early 2015. The August index value of 118.1 is little changed since the end of 2016, telling us that the Michigan economy has lost momentum over the last two years, coincident with the levelling of U.S. auto sales that began in late 2015. In 2018 it looks like the trend in auto sales is down even though they bounced back in September, to a 17.4 million unit rate. A key missing piece for the Michigan economy is momentum in the housing sector. Residential construction activity remains subdued. House prices have advanced in this business cycle, but appear to have stalled out this summer. Only three out of nine index components were positive in August. They were nonfarm employment, auto production and state sales tax revenues. The six declining components were unemployment insurance claims (inverted), housing starts, house prices , industrial electricity sales, total state trade and hotel occupancy. Consumer conditions in the U.S. are good with strong labor markets and high consumer confidence. However, Michigan’s auto sector has some headwinds in the form of higher materials and labor costs and higher interest rates. The resolution of the U.S.-Mexico-Canada Trade Agreement removes some uncertainty for many Michigan businesses. The pact remains to be ratified by each country.

For a PDF version of this article, please click here: Comerica Bank's Michigan Index Drops

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.
 

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Comerica Bank's Michigan Index Slips Again

September 27, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index fell again in July to a level of 118.4. July’s reading is 21 points, or 21 percent, above the index cyclical low of 97.9. The index averaged 118.2 points for all of 2017, one point above the index average for 2016. June’s index reading was 118.8.

Comerica Bank’s Michigan Economic Activity Index slipped again in July, after falling in June. The July 2018 index value of 118.4 matches the value from April 2017, and is just 0.5 percent greater than July 2017, showing little forward momentum in the Michigan economy over the last year. With the state’s auto industry either at or post peak, and trade disruptions adding to economic uncertainty, the Michigan economy is cooling, but not contracting. Only two out of nine industry components were positive in July. They were non-farm employment and industrial electricity demand. Seven components lost ground in July, including unemployment insurance claims (inverted), housing starts, house prices, vehicle production, total state trade, hotel occupancy and state sales tax revenues. Uncertainty about international trade is an ongoing negative factor for many Michigan businesses. The Trump Administration has set a late September deadline for its trade negotiations with Canada, which would bring Canada into the already-complete U.S.-Mexico trade framework. It is unlikely that the deadline will be met. The Trump Administration is expected to request approval from Congress for a Mexico-only deal and at the same time continue negotiations with Canada. The U.S. Commerce Department must determine whether auto imports threaten national security before the Trump Administration can unilaterally impose taxes on Canadian auto products.

For a PDF version of this article, please click here: Comerica Bank's Michigan Index Slips Again

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.
 

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Comerica Bank's Michigan Index Dips

August 29, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index decreased in June to a level of 118.8. June’s reading is 21 points, or 21 percent, above the index cyclical low of 97.9. The index averaged 118.2 points for all of 2017, one point above the index average for 2016. May’s index reading was revised to 119.3.

Comerica Bank’s Michigan Economic Activity Index dipped in June, breaking a string of three consecutive monthly gains last spring. The Michigan Index has been largely range-bound over the last 12 months, with the June 2018 index value just 0.25 percent above June 2017. This points to cooler overall economic growth for Michigan over the last year. In June, four index components were positive. They were nonfarm payrolls, unemployment insurance claims (inverted), hotel occupancy and state sales tax revenues. Five index components were negative. They were housing starts, house prices, industrial electricity demand, automobile and light truck production and total state trade. The Trump Administration has announced a new trade deal with Mexico that should remove some uncertainty for the auto industry. Auto stocks rallied on the news. Of note for the auto industry, the deal stipulates that 75 percent of the content of cars built under agreement comes from North America, above the current 62.5 percent. Also, 40-45 percent of the content of cars must be made by workers earning at least $16 per hour. The trade deal still must be ratified by Mexico and the U.S., which is not necessarily a sure bet. Canada was not included in the trade negotiations between the U.S. with Mexico. Canadian trade officials are currently in negotiations with U.S. trade officials, but the prospects for a trilateral trade pact are uncertain.

For a PDF version of this article, please click here: Comerica Bank's Michigan Index Dips

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank's Michigan Index Extends Gains

August 1, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index increased in May to a level of 119.4. May’s reading is 21 points, or 22 percent, above the index cyclical low of 97.9. The index averaged 118.2 points for all of 2017, one point above the index average for 2016. April’s index reading was revised to 118.8.

Comerica Bank’s Michigan Economic Activity Index increased in May for the third consecutive month. Six out of nine sub-indexes were positive in May. The were unemployment insurance claims (inverted), housing starts, house prices, industrial electricity demand, hotel occupancy and sales tax revenues. The auto and light truck production sub-index eased in May, as did the sub-index for total state trade. The non-farm employment sub-index was unchanged in May. Strong U.S. job growth and elevated consumer confidence have been supportive of Michigan’s auto industry this year. However, there are some headwinds. Steel and aluminum import tariffs have cut into automaker profitability and are putting pressure on auto prices. Higher gasoline prices are increasing the cost of operating the light trucks and SUVS that roll off of Michigan assembly lines. Higher interest rates are also boosting the cost of financing vehicles. Stalled residential construction numbers this year may be weighing on demand for new pickup trucks. U.S. Trade Representative Robert Lighthizer said at the end of July that it was possible that NAFTA partners could reach a tentative agreement in August. That would allow outgoing Mexican President Enrique Pena Nieto to sign an agreement before he leaves office in December. We expect that the end of NAFTA-related uncertainty will be a positive for Michigan businesses, however, it may not remove other trade-related uncertainty.

For a PDF version of this article, please click here: Comerica Bank's Michigan Index Extends Gains

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank's Michigan Index Up Again | June 2018

June 27, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Index Up AgainComerica Bank’s Michigan Economic Activity Index increased in April to a level of 119.0. April’s reading is 21 points, or 22 percent, above the index cyclical low of 97.9. The index averaged 118.2 points for all of 2017, one point above the index average for 2016. March’s index reading was revised to 118.7.

Comerica Bank’s Michigan Economic Activity Index increased in April, following a gain in March. This shows renewed economic momentum after stalling from December through February. The sub-indexes were mostly positive,  seven increased and two decreased in April. Nonfarm payrolls, unemployment insurance claims (inverted), house prices, vehicle assemblies, state trade, hotel occupancy and state sales tax revenues were all positives for April. Housing starts and industrial electricity demand were negatives. Vehicle assemblies increased from February through April. However, we have already seen a large drop in assemblies for May, indicating that vehicle assemblies could become a drag on the Michigan Index by early summer. Trade actions by the U.S. and by our key trading partners, Canada and Mexico, have increased uncertainty for many Michigan businesses. Some businesses are responding by reducing borrowing and delaying investment. This could also weigh on hiring. The current economic drag from trade uncertainty is small. However, there is potential for more drag if trade wars escalate and if the auto sector is materially impacted. Higher gasoline prices are also a negative for Michigan’s auto industry. The national average gasoline price is about $2.85 per gallon, 60 cents higher now than a year ago. This eats into discretionary spending by U.S. households and may curb the demand for large SUVs and pickup trucks.

 

For a PDF version of this article, please click here: Michigan Index June 2018

 

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations.  The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team.  We are not offering or soliciting any transaction based on this information.  We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation.  Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed.  Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information. 

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Comerica Bank’s Michigan Index Improves

June 4, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index increased in March to a level of 118.6.  March’s reading is 21 points, or 21 percent, above the index cyclical low of 97.9. The index averaged 118.1 points for all of 2017, nine-tenths of a point above the index average for 2016. February’s index reading was 118.3.

Comerica Bank’s Michigan Economic Activity Index increased in March after a slight decline in February. The sub-indexes were mixed, with more up than down for the month. Seven out of nine index components were positive in March including nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, industrial electricity consumption, auto and light truck production and hotel occupancy. The two negative index components were total state trade and state sales tax revenues. Since March 2017, our Michigan Index has been positive six times, negative four times and moved sideways twice. Following the slump in Michigan economic activity in the first half of 2017, steady gains in the state’s economy were supported by consistent job growth from October through March. However, the preliminary read for April showed Michigan actually lost 10,000 jobs for the month. As we move further past peak auto sales, the pace of hiring in Michigan’s manufacturing sector continues to moderate. Auto production is expected to eventually tick down back to levels seen prior to last year’s hurricanes,  which gave a temporary boost to sales and production. International trade negotiations remain in flux and could exert a significant impact on the Michigan economy, with both winners and losers. The state’s services sector is healthy and will continue to expand this year. 

Michigan Economic Activity Index

 

Explanatory Note:

The Michigan Economic Activity Index consists of nine variables, as follows: nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house price index, industrial electricity sales, auto assemblies, to-tal trade, hotel occupancy and sales tax revenue. All data are seasonally adjusted. Nominal values have been convert-ed to constant dollar values. Index levels are expressed in terms of three-month moving averages.

Comerica Bank, with one of the largest banking center networks in Michigan, is a subsidiary of Comerica Incorporated (NYSE: CMA), a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Business Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships, and help-ing people and businesses be successful. In addition to Michigan and Texas, Comerica Bank locations can be found in Arizona, California, and Florida, with select businesses operating in several other states, as well as in Canada and Mexi-co.

To subscribe to our publications or for questions, contact us at ComericaEcon@comerica.com. Archives are available at http://www.comerica.com/insights. Follow us on Twitter: @Comerica_Econ.

For a PDF version of this report click here: Comerica Michigan Index

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

 

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Comerica Bank’s Michigan Index Flat | April 2018

April 26, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index remained flat in February at a level of 118.3. January’s reading is 20 points, or 21 percent, above the index cyclical low of 97.9. The index averaged 118.1 points for all of 2017, four-fifths of a point above the index average for 2016.

Comerica Bank’s Michigan Economic Activity Index was unchanged at 118.3 in February, for the third consecutive month at that level. The Michigan Index remains below its recent peak of 118.6 from May and June of last year. Five out of nine index components were positive in February. They were nonfarm employment, unemployment insurance claims (inverted), house prices, industrial electricity consumption and auto and light truck production. The four negative index components were housing starts, total state trade, hotel occupancy and state sales tax revenues. Michigan’s economy has clearly lost momentum as the U.S. business cycle ages. Vehicle production was a consistent weight on the index from November 2016 through September 2017. The auto sales surge from last fall allowed automakers to ramp up production again in early 2018, but we believe that will be short-lived. We expect to see flat-to-gradually declining auto sales for the remainder of this year. That will keep production in check and contribute to an ongoing flat index for Michigan in 2018. We forecast the non-auto components of the state economy to be flat-to-positive through the remainder of this year. We expect tight housing supply to continue to support house price gains this year. However, Michigan’s ongoing net population outflow, resulting in weak population growth, will keep new home construction subdued compared to other markets.

For a PDF version of this report click here: MI-Index-0418.

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Michigan Index Unchanged

March 28, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index remained unchanged in January at a level of 118.3. January’s reading is 20 points, or 21 percent, above the index cyclical low of 97.9. The index averaged 118.1 points for all of 2017, four-fifths of a point above the index average for 2016. December’s index reading was revised to 118.3.

Comerica Bank’s Michigan Economic Activity Index was unchanged in January, following three consecutive monthly increases between October and December. The index was split between gains and losses. Five of the nine sub-indexes were positive for January, including nonfarm-payrolls, house prices, industrial electricity demand, total state trade and hotel occupancy. The four sub-indexes that were negative for the month were unemployment insurance claims (inverted), housing starts, auto production and state sales tax revenues. This is not the first time that the index has gone unchanged in recent history. Last year the index stalled in June and turned south from July to September as state nonfarm payrolls declined. At the same time, auto production saw an 11 month decline from November 2016 through September 2017. January’s stall strikes a cautionary note, however there are some positives. First, Michigan continued to see monthly nonfarm payroll gains through February. The labor market remains solid as monthly unemployment insurance claims approach historical lows. Second, while the boost from post-hurricane auto sales last fall continues to dissipate, the sales rate is dropping to pre-hurricane levels slower than originally anticipated. This could be a sign that auto sales will remain stronger than expected this year. A major wildcard this year is international trade. The eighth round of NAFTA talks is tentatively set for April.

For a PDF version of this report click here: MI-Index-0318.

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Michigan Index Increases

February 28, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index increasedby 0.3 percent in December to a level of 118.6.December’s reading is 21 points, or 21 percent, above theindex cyclical low of 97.9. The index averaged 118.2 pointsfor all of 2017, nine-tenths of a point above the index averagefor 2016. November’s index reading was 118.3.

Comerica Bank’s Michigan Economic Activity Index movedup again in December, its third consecutive monthly increase.Gains across the Michigan economy were widespread.Seven of the nine factors were positive in December,including nonfarm payrolls, unemployment insuranceclaims (inverted), housing starts, house prices, auto production,total state trade and hotel occupancy. Industrialelectricity demand and state sales tax revenues were bothnegative. The Michigan economy has been riding the tailwindof a late 2017 increase in domestic auto production.After hitting its cyclical peak in 2015 and 2016, auto productionbegan to slow through the first half of 2017. Thedestruction of autos from last year’s hurricanes, whichstruck Texas and Florida, helped pull forward automobiledemand. The boost to demand is proving temporary. U.S.auto sales slid from a 17.8 million unit rate in December to17.2 million in January. We expect auto sales to continuemoderating this year, which will pull domestic auto productiondown, and this will be drag on our Michigan Index.We also look for moderating job growth in non-autorelatedmanufacturing in Michigan this year. This meansthe state will rely more on its services sector to push upjob and economic growth moving forward. The U.S., Canadaand Mexico are in the seventh round of NAFTA discussionsin Mexico City. This round of negotiations is expectedto end in early March without a final agreement.

For a PDF version of this report click here: MI_Index_0218

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Michigan Index Up Again

February 1, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index in-creased by 0.4 percent in November to a level of 118.3. November’s reading is 20 points, or 21 percent, above the index cyclical low of 97.9. The index averaged 117.3 points for all of 2016, two points above the index average for 2015. October’s index reading was 117.8.

Comerica Bank’s Michigan Economic Activity Index in-creased again in November. The Michigan Index has now posted two consecutive monthly gains, following a mid- 2017 stall. Eight of the nine factors were positive in November including nonfarm payrolls, unemployment insurance claims (inverted), housing starts, house prices, auto production, total state trade, hotel occupancy and state sales tax revenues. Industrial electricity demand was negative for the month. Michigan nonfarm payroll growth moderated in 2017 and posted the weakest annual gain since 2010. The state’s labor market is getting less of a lift from its manufacturing sector. Total Michigan manufacturing jobs were up just one percent on average over the past two years. U.S. auto sales finished 2017 on a positive note with help from hurricane-related replacements in Texas, Florida and elsewhere. While we expect to see auto sales ease in 2018, we do not expect to see a steep decline. In-stead, we look for another year of above-average auto sales with solid domestic demand anchored by U.S. job creation, high consumer confidence, relatively low borrowing costs, an aging U.S. auto fleet and stimulus from tax reform. Ongoing strong auto production would sustain the state’s economy through 2018, along with an improving service sector. The NAFTA negotiations are a risk factor for the state. We expect the Michigan economy to post moderate growth in 2018.

For a PDF version of this report click here: MI_Index_0118

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Michigan Index Improves

January 3, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index increased by 0.4 percent in October to a level of 117.8. October’s reading is 20 points, or 20 percent, above the index cyclical low of 97.9. The index averaged 117.3 points for all of 2016, two points above the index average for 2015. September’s index reading was revised to 117.3.

Comerica Bank’s Michigan Economic Activity Index increased slightly in October after stalling through last summer. The October gain is the first increase in the Michigan Index since last May. Over the previous 12 months, the Michigan Index was up only 0.8 percent in October, so it is fair to say the Michigan economy was feeling less momentum through most of 2017 than it did in 2016. Positive factors for October were nonfarm payrolls, housing starts, house prices and auto production. Industrial electricity demand, total state trade, hotel occupancy and state sales tax revenues were negatives. We expect auto sales to ease gradually through 2018 as the support from hurricane related replacements in Texas and Florida fades. A key positive for auto sales in 2018 will be the expected solid performance of the U.S. economy. However, with auto sales currently near the cyclical peak of the mid-2000’s, it looks like there is only limited upside potential for sales even in a relatively strong economy. We look for the service sector in Michigan to support modest growth going forward as the push from auto-related manufacturing eases. Tax reform will be an overall positive for the U.S. economy, including Michigan. However, higher interest rates through 2018 are a developing headwind for both the auto sector and real estate.

For a PDF version of this report click here: MI_Index_1217

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Michigan Index Down Again

December 5, 2017 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index declined by 0.2 percent in September to a level of 117.2. September’s reading is 19 points, or 20 percent, above the index cyclical low of 97.9. The index averaged 117.1 points for all of 2016, one and four-fifths points above the index average for 2015. August’s index reading was revised up to 117.4.

Comerica Bank’s Michigan Economic Activity Index was down again in September, now its fourth consecutive monthly decline. Production of autos and light trucks has declined 11 out of the last 12 months as demand for autos likely peaked in 2016. The recent boost to auto sales, due to replacement of vehicles damaged during the active hurricane season, continued into October and November. This is expected to provide only temporary relief to slowing auto production. September index results were mixed. Four out of nine sub-indexes were positive for the month including nonfarm payrolls, industrial electricity demand, hotel occupancy and state sales tax revenue. The four subindexes that were negative were unemployment insurance claims (inverted), housing starts, vehicle production and total state trade. House prices were unchanged. Other parts of the state’s economy are seeing a slowdown as the state’s auto industry adjusts to a lower demand environment. Housing starts have trended lower in recent months. Also, while state home prices remain up on a year-ago basis, month-to-month home prices have remained flat since April in the Detroit metropolitan area. Michigan job growth has been inconsistent over the past few years. We expect to see only modest job growth for the state through next year.

For a PDF version of this report click here: MI_Index_1117

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Michigan Index Falls

October 31, 2017 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Texas Economic Activity Index decreased by 0.9 percent in August to a level of 127.9. August’s index reading is 32 points, or 34 percent, above the index cyclical low of 95.5. The index averaged 124.3 points for all of 2016, one and three-fifths points below the average for full-year 2015. July’s index reading was 129.1.

The Comerica Bank Texas Economic Activity Index dipped in August after increasing for the prior two months. The Texas economy has been buffeted by a dynamic energy market and Hurricane Harvey in recent months and has shown remarkable resilience to both sets of events. Houston is largely back to work after the record-breaking flooding of late August through early September. The industrial base is well on its way back to full operating capacity. The lingering effects of Hurricane Harvey will be borne by the households that endured extensive property damage due the flooding. According to Moody’s Analytics, Harvey caused $73.5 billion in economic losses, second only to Hurricane Katrina in 2005.  Our index results for August were mixed. Three out of nine sub-indexes were positive for the month. They were nonfarm payrolls, house prices and industrial electricity demand. The four negative components were housing starts, the state rig count, total state trade and sate sales tax revenues. Unemployment insurance claims were neutral for August. We expect to see more mixed results in September. We already know that state payroll employment fell by 7,300 jobs in September, so that will be a drag. Looking ahead, we expect to see positive economic momentum for the state to re-emerge before the end of the year. The rebuilding effort in South Texas will be a positive, as will recently firming oil prices.

For a PDF version of this report click here: MI_Index_1017

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information. 

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Comerica Bank's Michigan Index Stays in Neutral

June 29, 2017 by Robert A. Dye, Ph.D, Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index eased 0.1 percentage points in April to a level of 130.8. April’s reading is 57 points, or 77 percent, above the index cyclical low of 74.1. The index averaged 127.7 points for all of 2016, four and one-tenth points above the index average for 2015. March’s index reading was 130.9.

“The Comerica Bank Michigan Economic Activity Index for April was essentially unchanged from March, about where it has been for the last five months. Five out of eight index components were positive in April, including nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices and hotel occupancy. State exports, auto production and sales tax receipts were negative factors for the month. We expect national auto sales for the remainder of this year to remain below last year’s record setting pace. Auto production will likely remain a slight drag on the index through the second half of this year,” said Robert Dye, Chief Economist at Comerica Bank. “As auto production has eased, so has job growth in Michigan. For the year ending in April, nonfarm payrolls were up 1.7 percent in Michigan, still above the U.S. average of 1.5 percent. However, job growth will likely fall below the U.S. average in the second half of this year.” 

For a PDF version of the Michigan Economic Activity Index click here:  Michigan_Index_0617.pdf

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Comerica Bank’s Michigan Index Continues Gains

January 31, 2017 by Daniel Sanabria

Comerica Bank’s Michigan Economic Activity Index improved in November, up 1.3 percentage points to a level of 129.7. November’s reading is 56 points, or 75 percent, above the index cyclical low of 74.1. The index averaged 123.6 points for all of 2015, five and four-fifths points above the index average for 2014. October’s index reading was 128.4.

“The Comerica Bank Michigan Economic Activity Index increased for the second consecutive month in November. The state economy is showing broad-based gains, with six of the eight index components up for the month. Nonfarm employment, unemployment insurance claims (inverted), housing starts, home prices, sales tax revenues and hotel occupancy were all up in November. State exports eased, as did auto production. Year-over-year job growth for Michigan remains above the U.S. average, dipping slightly to 2.1 percent in November. The state’s unemployment rate declined to about even with the national average by late 2015 and remains close. Many industries report very tight labor market conditions and this will keep upward pressure on wages through 2017,” said Robert Dye, Chief Economist at Comerica Bank. “The Trump Administration is focused on keeping auto sector jobs in Michigan and this will help to extend the current positive business climate for the state.”

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For a PDF version of the Michigan Economic Activity Index click here: Michigan_Index_0117.

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