But strong U.S. dollar may create future headwinds
The auto industry continued to fuel the state’s economic expansion, with Comerica Bank’s Michigan Economic Activity Index rising for the fourth straight month in July, increasing 0.8 percentage points to a level of 127.4.
July’s reading is 53 points, or 72 percent, above the index cyclical low of 74.0 hit in June 2009. The index averaged 117.4 points last year.
“Our Michigan Economic Activity was again fueled by the auto industry, as auto production climbed through mid-summer,” said Robert Dye, the bank’s chief economist.
“The labor market components of the index continue to reflect improving conditions, as hiring increased in a broad range of industries, including professional and business services. Exports, house prices and housing starts were minor drags on the index in July,” he said.
“Low gasoline prices are a plus for Michigan’s economy. However, the strengthening dollar is a growing headwind for the manufacturing sector.”
The index consists of eight variables — nonfarm payrolls, exports, hotel occupancy rates, continuing claims for unemployment insurance, housing starts, sales-tax revenues, home prices and auto production.
All data are seasonally adjusted and indexed to a base year of 2008. Nominal values have been converted to constant dollar values.
