Comerica Bank’s Michigan Economic Activity Index was down slightly in December by 0.1 percentage points to a level of 129.7. December’s reading is 56 points, or 75 percent, above the index cyclical low of 74.1. The index averaged 127.8 points for all of 2016, four and one-fifth points above the index average for 2015. November’s index reading was 129.8.
“The Comerica Bank Michigan Economic Activity Index was essentially unchanged in December, decreasing by just one-tenth of a percent. Five components were positive for the month, including nonfarm payrolls, housing starts, home prices, state sales tax receipts and hotel occupancy. The negative factors were state exports, unemployment insurance claims (inverted) and auto production. The strong dollar and uncertainty about U.S. trade agreements imply ongoing downside risk for Michigan’s international exports. However, a stronger domestic economy would be a counterweight to reduced global demand. Auto production also has downside risk with the expectation that U.S. auto sales will ease this year after the record pace of 2016. Again, a stronger U.S. economy could shift that expectation,” said Robert Dye, Chief Economist at Comerica Bank. “Higher interest rates this year are another potential headwind for Michigan, likely reducing both housing and auto affordability.”
For a PDF version of the Michigan Economic Activity Index click here: Michigan_Index_0217.