Landscape Image [Size 960 x 300]

comerica-michigan-ambassador-bridge_960x300

Portrait Image [Size 620 x 415]

Short Description (Double click to edit..)

Comerica Bank’s Michigan Economic Activity Index increased in May to a level of 119.4.



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.