(As seen on WZZM TV 13) Comerica Bank’s Michigan Economic Activity Index increased in July to a level of 107.6, over seven points higher than the average for all of last year.
July’s reading was 25.4% higher than the historical low of 85.8 reached in June 2020. The index averaged 100 points for all of 2020, 9 points below the index average for 2019. June’s index reading was revised to 107.3.
Comerica’s Michigan Economic Activity Index increased by 0.3% in July, for its eighth consecutive monthly gain.
“The index is within striking distance of its pre-COVID level of 109.2 from February 2020,” said the report authored by Robert Dye, senior vice president and chief economist at Comerica. “We expect it to get there before the end of the year, pending increased output by automakers.”
The auto production sub-index for July was up slightly for the month at 89.8, still well below its February 2020 level of 106.2.
In July, six out of nine sub-indexes improved. The gainers were nonfarm employment, unemployment insurance claims (inverted), house prices, light vehicle production, total state trade and hotel occupancy. Industrial electricity demand and state sales tax revenues declined. Housing starts were unchanged.
COVID-19 cases increased in Michigan since midsummer, as they did in many other states. Fortunately, the most recent data through mid-September shows a flattening curve for new cases, Comerica reported.
“We expect business to continue to operate in the state without increased restrictions through the remainder of this year,” Dye wrote.
Even without new restrictions, the state’s manufacturing sector will face the continued challenges of a tightening labor market and supply chain constraints, the report said. Light vehicle assemblies increased for the second straight month in August to a 9.235-million-unit annual rate, which still is well below the roughly 11-million-unit rate trend through 2018 and 2019.
Comerica’s Michigan Economic Activity Index consists of nine variables: 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 is a subsidiary of Comerica Inc. (NYSE: CMA), a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Commercial Bank, The Retail Bank and Wealth Management. In addition to Texas, Comerica Bank has locations in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico. Comerica reported total assets of $86.3 billion as of March 31, 2021.