DALLAS, Jan. 30, 2020 /PRNewswire/ -- Comerica Bank's Michigan Economic Activity Index declined in November to a level of 117.4. November's reading is 20 points, or 20 percent, above the index cyclical low of 97.9. The index averaged 118.6 points for all of 2018, 0.3 points above the index average for 2017. October's index reading was 117.8.
Comerica Bank's Michigan Economic Activity Index ticked down again in November. We expected the resolution of the GM/UAW strike in October to be a positive factor for the Michigan Index in November. However, the components of the Michigan Index remained mixed for the month. Payroll employment was little changed in November, slightly up on a monthly basis, but still below the August level. The three positive components of the Michigan Index in November were house prices, light vehicle production and hotel occupancy. The five negative components were unemployment insurance claims (inverted), housing starts, industrial electricity demand, total state trade and state sales tax revenue. We are still hopeful that the resolution of the GM/UAW strike will bring the index back up. However, it is fair to say that the state economy is manifesting only limited momentum. U.S. manufacturing indicators show that sector of the economy to be in contraction through yearend 2019. The automobile sales cycle appears to be past its peak. U.S. light vehicle production has eased from a peak annual rate of 13.2 million units in May 2015, to a 10.3 million unit rate in December. The CEO of German auto parts maker Bosch has speculated that global car production is past its peak. U.S. auto parts maker Borg Warner announced plans to buy Delphi Technologies, with possible implications for Michigan labor demand.
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, with one of the largest banking center networks in Michigan, is a subsidiary of Comerica Incorporated (NYSE: CMA), a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Business Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Michigan and Texas, Comerica Bank locations can be found in Arizona, California, and Florida, with select businesses operating in several other states, as well as in Canada and Mexico.
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