The Grand Rapids Business Journal/e-forecasting.com Michigan Leading Economic Indicator, Michigan’s early bird of economic activity, increased in September 2009 to a reading of 98.7, where 2,000 is set equal to 100.
The private forecasting service said the composite Michigan index of state leading indicators went up 0.9 percent in September after an increase of 1.1 percent in August. This is the third consecutive month for an increase in the growth rate and, more importantly, shows a positive trend in the market, a reversal of the long negative trend.
By looking at the historical data, the last time that there has been more than three consecutive months of increase in the growth rate occurred September-December 2005.
Eight of the 10 components that make up Michigan’s Leading Indicator had a positive contribution in September: Unemployment Claims, Weekly Hours in Manufacturing, Building Permits, Exports of Manufactures, Consumer Expectations (Regional), Stock Prices (National) Interest Rate Spread and Employment Barometer.
Two of the 10 components had a negative contribution to Michigan’s Leading Indicator in September: New Orders (Detroit Business) and Productivity Barometer (Detroit Business).
Looking at its six-month growth rate, a signal of turning points, Michigan’s Leading Indicator went down by an annual rate of 0.7 percent in September, after a decline of 3.4 percent in August. This compares to a long-term annual growth rate of 1.7 percent, the same as the annual growth rate of the state’s overall economic activity.
Evangelos Simos is chief economist of the consulting firm Infometrica Inc.