DALLAS, June 24, 2021 /PRNewswire/ -- Comerica Bank's Michigan Economic Activity Index increased in April to a level of 105.9. April's reading was 23.4 percent higher than the historical low reached in June 2020. The index averaged 100 points for all of 2020, 9.1 points below the index average for 2019. March's index reading was revised to 104.7.
Our Michigan Economic Activity Index increased for the fifth consecutive month in April. Six out of nine components were positive for the month, including nonfarm payrolls, unemployment insurance claims (inverted), house prices, industrial electricity demand, hotel occupancy and state sales tax revenue. The two negative components for April were housing starts and light vehicle production. The state trade sub-index was unchanged for the month. Michigan is clearly participating in the reflation story for the U.S. economy. Michigan's rebound would be even stronger if vehicle production was not impaired by the global computer chip shortage. The good news is that the latest data for U.S. vehicle assemblies for the month of May showed an improvement over April's low 8.83 million unit annual rate, to a 9.85 million unit annual rate. Likewise, manufacturing employment in Michigan improved in May, gaining 4,600 jobs, after falling by 7,900 jobs in April. The recent surge in COVID-19 cases in Taiwan has hurt production in chip plants there and delayed normalization in the global chip market. This and other supply chain bottle necks are expected to keep global auto production throttled back through the second half of this year. With strong demand but weak production, U.S. auto inventories sunk to 254,800 units in April, a record low for the data series which begins in January 1993. We expect demand for new cars to remain strong through the end of this year.
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. Nominal values have been converted to constant dollar values. Index levels are expressed in terms of three-month moving averages.
Comerica Bank is a subsidiary of Comerica Incorporated (NYSE: CMA), a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Commercial Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico. Comerica reported total assets of $86.3 billion at March 31, 2021.
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SOURCE Comerica Bank
