DETROIT — Comerica Bank’s Michigan Economic Activity Index continued to grow in May, increasing 3.3 percentage points to reach a level of 124.8, its strongest monthly gain in more than 10 years.
The index averaged 117.4 points for all of 2014, three and three-tenths points above the index average for 2013.
“The 3.3 percent gain in our Michigan Economic Activity Index for May was the strongest monthly gain since February 2005,” said Comerica chief economist Robert Dye. “May continued a strong run for the Michigan economy, which began last November, and was interrupted in February, primarily as a result of very bad winter weather. The climate is better in Michigan now in more ways than one. The U.S. auto industry is enjoying strong sales and solid profitability, supported by an improving U.S. economy and low gasoline prices. This is a tailwind for the state of Michigan, fostering broad-based economic gains. Seven out of eight components of our Michigan Index increased in May, including labor market and housing-related indicators.”
May’s reading was 51 points, or 69 percent, above the index cyclical low of 74, reached at the bottom of the last recession.
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. Current values have been converted to constant dollar values, eliminating the effect of inflation on the index. Index levels are expressed in terms of three-month moving averages.
Archives of Comerica economic indices are available at www.comerica.com/economics.