Comerica Bank's Michigan Index Inches Up
Comerica Bank's Michigan Economic Activity Index rose to 107.2 in June, reflecting a 24.9% increase from the historical low in June 2020. This marks the seventh consecutive monthly gain with a 0.4% increase from May. Four sub-indexes showed improvement: house prices, industrial electricity demand, hotel occupancy, and state sales tax revenues, while four sub-indexes declined. Auto assembly rates increased but remain below pre-pandemic levels due to semiconductor shortages. The current COVID surge may delay normalization of activity.
- Michigan Economic Activity Index increased 0.4% in June.
- Index level of 107.2 is 24.9% higher than June 2020 low.
- Seventh consecutive monthly gain for the index.
- Improvements in house prices, industrial electricity demand, hotel occupancy, and state sales tax revenues.
- Declines in unemployment insurance claims, housing starts, light vehicle production, and total state trade.
- Auto assembly rates remain well below pre-pandemic levels due to semiconductor shortages.
- Current COVID-19 surge could push back expectations for consumer and business activity normalization.
DALLAS, Aug. 23, 2021 /PRNewswire/ -- Comerica Bank's Michigan Economic Activity Index increased in June to a level of 107.2. June's reading was 24.9 percent higher than the historical low of 85.8 reached in June 2020. The index averaged 100 points for all of 2020, 9.0 points below the index average for 2019. May's index reading was revised to 106.8.
Our Michigan Economic Activity Index increased 0.4 percent in June, posting its seventh consecutive monthly gain. Four of the nine sub-indexes improved for the month. They were house prices, industrial electricity demand, hotel occupancy and state sales tax revenues. Four sub-indexes fell in June including unemployment insurance claims (inverted), housing starts, light vehicle production and total state trade. Nonfarm employment was unchanged for the month. Auto and light truck assemblies increased from an 8.6 million unit rate in June to a 9.4 million unit pace in July. This is still well below the 11 million unit pace from pre-pandemic times. The global semiconductor shortage continues to weigh on auto production. The outbreak in COVID cases in Southeast Asia in early summer restricted chip production. We expect supply chain disruptions to gradually ease through the fall, but not disappear, as COVID impairs both U.S. and global production and distribution. We also expect the supply of new vehicles to improve over the coming months, helping to shift demand away from the used vehicle market. One sign that this is happening was the leveling off of used car prices in July. The current surge in COVID cases across the U.S. is pushing back our expectations for renormalizing consumer and business activity this fall. Michigan case counts remain below the spring peak, but we expect to see them rise in the coming weeks.
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 is a subsidiary of Comerica Incorporated (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. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found 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
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