Comerica Bank's Michigan Index Improving
Comerica Bank's Michigan Economic Activity Index rose to 103.1 in August, marking a 19% increase from its cyclical low. This improvement follows earlier business re-openings in summer, with all nine sub-indexes showing gains for at least two months. Key indicators such as housing starts, light vehicle production, and hotel occupancy have also improved. However, potential risks loom from rising COVID-19 cases and declining auto demand, which could affect Michigan's economic recovery. Comerica reported total assets of $83.6 billion as of September 30, 2020.
- Michigan Economic Activity Index increased to 103.1 in August, 19% above the cyclical low.
- All nine sub-indexes improved for at least the second consecutive month.
- Key economic indicators like housing starts and light vehicle production showed improvement.
- Potential spread of COVID-19 could lead to restrictive policies, impacting regional economies.
- National risks include a decline in car and truck demand, possibly affecting vehicle production.
DALLAS, Oct. 29, 2020 /PRNewswire/ -- Comerica Bank's Michigan Economic Activity Index increased in August to a level of 103.1. August's reading was 16 points, or 19 percent, higher than the cyclical low. The index averaged 117.7 points for all of 2019, 0.9 points below the index average for 2018. July's index reading was revised to 95.2.
Our Michigan Economic Activity Index rebounded in July and August as a result of the early summer business re-openings and resumption of economic activity. We expect the index to show ongoing improvement in September as well. In August, all nine sub-indexes improved for at least the second consecutive month. Housing starts, light vehicle production and hotel occupancy have improved for three consecutive months. House prices have continued to firm since late 2019. As the center of the U.S. auto industry, Michigan faces both regional and national risk factors through the remainder of this year. Regionally, we are very concerned about the spread of the coronavirus through the manufacturing intensive Midwest region. A late-2020 surge in cases could lead to more restrictive social mitigation policies and their associated drag on the regional and national economies. Nationally, there is downside risk for car and truck demand that could potentially lead to reduced vehicle production, and manufacturing employment, in Michigan. To date, light vehicle demand has bounced back after the spring lows. September saw a 16.6 million unit sales rate for the U.S. as improved consumer confidence allowed pent-up demand from last spring to get spent out. Boeing's recent announcement that the 737 Max is near final FTA approval is also good news for western Michigan manufacturers.
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 Incorporated (NYSE: CMA) is 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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SOURCE Comerica Bank
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