DETROIT—Comerica Bank’s Michigan Economic Activity Index decreased in August to a level of 106.6 from a revised July index of 107.4.
In August, Comerica economists said, only three of those components rose—nonfarm payrolls, unemployment insurance claims, and house prices. Four components declined—housing starts, industrial electricity demand, light vehicle production, and state sales tax revenue. Total state trade and hotel occupancy were unchanged.
Economists said the Michigan economy is being held back by supply chain issues and labor shortages in manufacturing, with U.S. auto and light ruck assemblies falling to a weak 6.45 million annual rate in September down from 9.85 million in July 2020. The global shortage of computer chips continues to be a key issue for automakers, but they also face shortages of resin, steel, paint, and other inputs.
August’s reading was 24.4 percent higher than the historical low of 85.7 reached at the bottom of the pandemic recession in June 2020. The index averaged 100 points for all of 2020, 9.0 points below the index average for 2019.
All data in the index are seasonally adjusted, converted to constant dollar values, and expressed as a three-month average.
The index is comprised of nine variables: nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, a house price index, industrial electrical sales, auto assemblies, total state trade, hotel occupancy, and state sales tax revenue.