East Michigan News

Comerica Bank’s Michigan Economic Activity Index increased in June, up from 2018, and can be attributed to the improvement in housing in Michigan, according to a press release from Comerica Bank.

Even though housing is looking good, many of the components of the Index are stagnant or have declined over the past year. The report states the Economic Activity Index increased to 117.7 and averaged to 118.4 points for all of 2018. May's index was 117.5.

"The Michigan Economic Activity Index consists of nine variables, as follows: nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house price index, industrial electricity sales, auto assemblies, total trade, hotel occupancy and sales tax revenue. All data are seasonally adjusted," the press release states.

Robert Dye | Consumer Bankers Association

Comerica Bank is a financial service company headquartered in Texas. Robert Dye, senior vice president and chief economist for Comerica Bank, says the company monitors the economies for their four key regional markets: Michigan, California, Texas, Florida and Arizona. 

“Both our housing starts sub-index and auto production sub-index for Michigan increased in June, pushing the headline index up,” Dye told East Michigan News. 

He attributes the rise to home mortgage rates being eased recently, which has supported home buying. 

Even though the June data points for housing look promising, the numbers still do not beat Michigan’s housing starts sub-index that peaked in 2017.

“The Michigan economy has local, regional, national and international connections. Local issues include the quality of the workforce, educational facilities and infrastructure,” said Dye. “Some local issues are very difficult to change, including the tendency for many Midwestern states to have an older population. In contrast, Michigan’s vitally important auto industry is becoming increasingly globalized, so many of the factors impacting the Michigan economy are national and international in scope.”

Home prices have continued to rise over the past year, but they are at a reduced rate. Fortunately for Michigan, the consumers are still buying goods. This has reflected well in auto sales. But, many businesses are keeping a close eye on the China trade war. 

“Virtually every business owner or senior manager that I have talked with recently is concerned about the U.S./China trade war,” Dye said. “Some businesses are impacted directly, but most are impacted indirectly through increased uncertainty and a generally cooler economic climate. Businesses hate uncertainty – it puts sand in the gears of commerce.”