DETROIT — Comerica Bank said brutal winter weather was behind a 1.9 percentage point fall in its Michigan Economic Activity Index in February.
The index fell to 118.7 from 120.6 in January.
The index averaged 117.6 points for all of 2014, 3.3 points above the index average for 2013, 114.3.
The Michigan Economic Activity Index consists of eight variables — nonfarm payrolls, exports, hotel occupancy rates, continuing claims for unemployment insurance, housing starts, sales tax revenues, home prices, and auto production — that are seasonally adjusted and indexed to a base year of 2008.
The index is also converted to constant dollars, factoring out inflation, and index levels are expressed as three-month moving averages.
February’s reading was 45 points, or 61 percent, above the index cyclical low of 73.8, reached at the bottom of the last recession.
“Our Michigan Economic Activity Index eased in February as severe winter weather gripped the Midwest and Northeast,” Comerica chief economist Robert Dye said in a statement. “Four components of our Michigan Index that were negative factors for February are weather-sensitive … unemployment insurance claims, housing starts, auto production, depressed by weaker sales, and sales tax revenue. Fortunately, U.S. auto sales bounced back in March to a 17.2 million unit pace after slumping through the winter. Also, we expect home sales and residential construction activity to improve this spring.”
Dye added that “with auto industry output nearing a cyclical peak, and other manufacturing industries feeling the headwinds of a weaker energy sector and a stronger dollar, we expect Michigan’s non-manufacturing industries to account for a bigger portion of new business for the state this year.”