DALLAS, July 20, 2021 /PRNewswire/ -- Comerica Bank's Michigan Economic Activity Index increased in May to a level of 106.7. May's reading was 24.4 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. April's index reading was revised to 105.5.
Our Michigan Economic Activity Index increased for the sixth consecutive month in May, and is showing strengthening growth rates over the last three months. It is gratifying to see the Michigan Index coming within striking distance of its pre-crisis level from early 2020. Six out of nine components were positive for May, including housing starts, house prices, light vehicle production, total state trade, hotel occupancy and state sales tax revenue. Unemployment insurance claims and industrial electricity demand were negatives for the month. Nonfarm employment was neutral. Unfortunately, we know from the June U.S. industrial production data that U.S. vehicle assemblies for June pulled back after expanding in May. Several auto plants in Michigan have either cut back on production or have been closed for extended periods this summer due to the global computer chip shortage and other supply chain constraints. This will weigh on July and August labor data for Michigan. We expect job growth to be strong this fall as auto production gradually normalizes and enhanced unemployment benefits expire. Despite poor sales this summer due to lack of inventory, we expect auto demand to remain strong. It will eventually get spent out as dealer inventories are rebuilt. We expect back-to-work and back-to-school programs this fall to allow more households to normalize their routines and promote demand for new autos.
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 $86.3 billion at March 31, 2021.
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SOURCE Comerica Bank
