Comerica Bank’s Michigan Economic Activity Index was flat in July, unchanged at a level of 86. The July index level is 15 points, or 21 percent, above the cyclical index low of 71. Year-to-date, the index has averaged 87 points, two points above the average for all of 2010.
“The Michigan economy received a needed boost from increased automobile production, beginning in July, as supply-chain constraints eased,” said Robert Dye, Chief Economist at Comerica Bank. “Sales for the three Detroit automakers held up in August and September despite the severe drop in consumer confidence that we saw at the end of the summer. As long as auto sales remain supportive of the rebound in production, the Michigan manufacturing sector will hold on to recent gains. Lower gasoline prices and ample pent-up demand are also positives for the auto sector. Outside of durable goods manufacturing, conditions remain challenging. Consumer spending is fundamentally constrained by a weak housing market and a downshift in global macroeconomic expectations is keeping hiring tentative.”