Comerica’s Michigan Index Sees Second Straight Decline

DETROIT — Comerica Bank economists are blaming the lingering effects of a tough winter for a second straight monthly decline in the Michigan Economic Activity Index.

The index fell 0.8 percentage points to a level of 117.8 in March, down from 118.6 in February.

“Our Michigan Economic Activity Index declined again in March, showing the impact of a lingering bad winter on the state economy,” said Comerica chief economist Robert Dye. “Residential construction activity in particular was delayed due to weather. Also, auto production ticked down as sales were hampered nationally by bad weather in February. The good news is that job creation continues to match the U.S. average, and that will support increasing consumer spending for Michigan households. So far in this business cycle the state’s manufacturing sector has added jobs at a steady rate. We expect those gains to taper as the business cycle matures, with more jobs coming from nonmanufacturing industries.”

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. All data are seasonally adjusted, and indexed to a base year of 2008. Index levels are expressed in terms of three-month moving averages.

The index averaged 117.6 points for all of 2014, 3.3 percentage points above the index average for 2013.

March’s reading is 44 points, or 60 percnet, above the index cyclical low of 73.8, reached at the bottom of the 2007-09 recession.

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