Comerica Bank's Michigan Index Ticks Higher
Comerica Bank's Michigan Economic Activity Index rose to 104.9 in March, a 23% increase from its historical low in June 2020. This marks the fourth consecutive monthly increase, with six of nine components showing positive results, notably in nonfarm payrolls and housing starts. However, challenges remain due to supply chain constraints in the auto sector affecting light vehicle production and trade. With COVID restrictions easing, a boost in services and construction is anticipated. Comerica reported total assets of $86.3 billion as of March 31, 2021.
- Michigan Economic Activity Index increased to 104.9 in March.
- Fourth consecutive month of growth in the index.
- Six positive components, including nonfarm payrolls and housing starts.
- Easing of COVID-related restrictions may enhance economic activity in Michigan.
- Global computer chip shortage showing signs of easing.
- Three negative components: light vehicle production, total state trade, and state sales tax revenues.
- Supply chain constraints continue to throttle auto production.
- Dealer inventory remains below normal levels.
DALLAS, June 1, 2021 /PRNewswire/ -- Comerica Bank's Michigan Economic Activity Index increased in March to a level of 104.9. March's reading was 23 percent higher than the historical low reached in June 2020. The index averaged 99.9 points for all of 2020, 9.2 points below the index average for 2019. February's index reading was revised to 104.1.
Our Michigan Economic Activity Index increased for the fourth consecutive month in March. Six out of nine components were positive for the month, including nonfarm payrolls, unemployment insurance claims (inverted), housing starts, house prices, industrial electricity demand and hotel occupancy. The three negative components for March were light vehicle production, total state trade and state sales tax revenues. Those three components have a common headwind from supply-chain constrained vehicle production this spring. Nonetheless, the Michigan economy is gaining momentum in its services industries and in construction. The State of Michigan has just rolled back the majority of its COVID-related business restrictions and is expected to eliminate nearly all restrictions by July 1. There are now no limits on outdoor gatherings including at sporting events and concerts. Indoor gatherings are still limited to 50 percent of maximum capacity. We expect bars and restaurants to staff up over the next month in anticipation of higher indoor capacity in July. The auto sector remains vexed by supply chain constraints. Production remains throttled and dealer inventory is well below normal. Fortunately, the global computer chip shortage is showing early signs of easing and may no longer be a binding constraint on production by the end of summer. We expect production and manufacturing employment in Michigan to improve through the summer.
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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