DETROIT — Comerica Bank’s Michigan Economic Activity Index increased by 0.3 percent in December to a level of 118.6, up from 118.3 in November.
The index is comprised of nine variables — non-farm payroll employment, continuing claims for unemployment insurance, housing starts, housing prices, industrial electricity sales, auto assemblies, total trade, hotel occupancy and sales tax revenue.
Bank economists said gains across the Michigan economy were widespread. Seven of the nine factors were positive in December, including nonfarm payrolls, unemployment insurance claims, housing starts, house prices, auto production, total state trade and hotel occupancy. Industrial electricity demand and state sales tax revenues were both negative.
They said the state economy was helped by auto production late in 2017, prompted by the destruction of autos in last year’s hurricanes. But that demand is temporary — auto sales fell from a 17.8-million-unit-per-year rate in December to a 17.2-million-unit rate in January. Bank officials say they expect auto sales to continue moderating this year, which will pull production down. They also expect moderating job growth in non-automotive-related manufacturing for 2018. This means the state will rely more on its services sector to push up job and economic growth.
December’s reading was 21 points, or 21 percent, above the index cyclical low of 97.9, hit at the bottom of ht last recession.
The index averaged 118.2 points for all of 2017, nine-tenths of a point above the index average for 2016.