Comerica Bank's Michigan Index Ticked Up

Rhea-AI Summary

Comerica Bank's Michigan Economic Activity Index rose to 105.6 in September, reflecting a 22% increase from the cyclical low of 86.9. This marks the third consecutive monthly increase, although the 2.5% growth rate suggests smaller future gains. Eight of nine components showed positive signs, with only housing starts declining. However, rising COVID-19 cases have led to tighter state restrictions, potentially impacting economic performance in Q4. Governor Whitmer proposed a $100 million relief plan to support businesses and households, amidst concerns about auto demand.

Positive

• Michigan Economic Activity Index increased to 105.6 in September.
• Index shows a 22% increase from cyclical low of 86.9.
• Eight out of nine index components were positive.
• Reported total assets of $83.6 billion as of September 30, 2020.

Negative

• COVID-19 restrictions may negatively impact Q4 economic performance.
• Decline in housing starts noted in September.
• Concerns about reduced demand for new automobiles due to consumer confidence drop.

DALLAS, Dec. 1, 2020 /PRNewswire/ -- Comerica Bank's Michigan Economic Activity Index increased in September to a level of 105.6. September's reading was 22 percent higher than the cyclical low of 86.9. The index averaged 117.9 points for all of 2019, 0.7 points below the index average for 2018. August's index reading was revised to 103.0.

Our Michigan economic activity index increased for the third consecutive month in September. While the rate of increase was still strong, at +2.5 percent for the month, the three-month trend points toward smaller monthly gains ahead. In September, eight out of nine index components were positive including nonfarm employment, unemployment insurance claims (inverted), house prices, industrial electricity demand, light vehicle production, total state trade, hotel occupancy, and sales tax revenue. The only declining element in September was housing starts. Due to increasing coronavirus infections this fall, Michigan has again tightened its social mitigation policies and this will drag on state economic performance in the fourth quarter. The most recent orders are effective from November 18 through December 9, closing schools, ending indoor dining at bars and restaurants and mandating working from home when possible. Governor Whitmer has asked the state legislature to approve a $100 million relief plan that would provide support to businesses and households. She has also asked for an extension of unemployment insurance benefits. Michigan's auto industry may also see reduced demand for new automobiles at year-end. The surge in coronavirus cases plus election uncertainty weighed on consumer confidence in November. We expect to see strong demand for new automobiles once confidence recovers as vaccines are distributed.

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 $83.6 billion as of Sept. 30, 2020.

To subscribe to our publications or for questions, contact us at ComericaEcon@comerica.com. Archives are available at http://www.comerica.com/insights. Follow us on Twitter: @Comerica_Econ.

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SOURCE Comerica Bank

FAQ

What was the Michigan Economic Activity Index in September 2020 for CMA?

The Michigan Economic Activity Index for Comerica Bank (CMA) rose to 105.6 in September 2020.

What are the main components of the Michigan Economic Activity Index?

The index includes nonfarm payroll employment, unemployment claims, housing starts, house prices, industrial electricity sales, auto assemblies, total trade, hotel occupancy, and sales tax revenue.

What proposal did Governor Whitmer make regarding COVID-19 economic relief?

Governor Whitmer proposed a $100 million relief plan to support businesses and households affected by COVID-19.

How much did the Michigan Economic Activity Index increase in September 2020?

The index increased by 2.5% in September 2020.

What restrictions were imposed in Michigan due to COVID-19?

Restrictions included closing schools, ending indoor dining, and mandating work from home where possible, effective from November 18 to December 9.