LANSING – Gains made in Michigan during the first three months of 2011 were wiped out by weak auto production and sales in the second quarter of the year, much of that due to the earthquake in Japan, Comerica Bank’s economic activity index for June finds.
The index, released Tuesday, came in at 86 in June, which was down one point. For the year, the index has averaged 88, which is three points above 2010. Besides a weak auto industry, there was feeble growth in nonfarm payroll jobs.
“A third quarter rebound in the state’s auto sector should provide lift to the index in coming months,” said Comerica’s Chief Economist Robert Dye. “However, downside risk to the broader U.S. economy and to the Euro-Zone economies remains elevated. The rapid decline in consumer confidence in August is particularly threatening to the auto sector. The good news is that there is ample pent-up demand for new cars, which would be unleashed in the presence of moderate job creation, stable gasoline prices and low interest rates.”
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