Comerica Bank's Michigan Index Up Again
DALLAS, Feb. 1, 2018 -- Comerica Bank's Michigan Economic Activity Index increased 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 increased 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. Instead, 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.
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, total trade, hotel occupancy and sales tax revenue. All data are seasonally adjusted. Nominal values have been converted 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 , 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 helping 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 Mexico.