Michigan’s economy sank in August, for the first time in nearly a year, according to a recent index released by Comerica Bank.
The Dallas-based bank’s Michigan Economic Activity Index for the month of August – the most recent data available – reached 106.6, down slightly from July’s revised data of 107.4. The reading represented the first monthly decline since November 2020, breaking a streak of eight consecutive monthly gains, according to the Comerica index.
The bank’s index is made up of nine variables: non-farm payroll employment, ongoing unemployment insurance claims, housing starts, the house price index, industrial electricity sales, assemblies automobiles, total trade, hotel occupancy and tax revenue. All data is seasonally adjusted and index levels are expressed in terms of three-month moving averages.
The August declines were driven by housing starts, industrial electricity demand, light vehicle production and tax revenues, according to the index.
“Michigan’s economy is hampered by supply chain issues and labor shortages that plague the state’s major manufacturing industries. July 2020, ”Comerica said in its report.
The report also highlights the current global shortage of computer chips, a key problem for automakers, and a plethora of other shortages.
“Industry experts estimate that the loss of production this year will cost US automakers $ 210 billion,” the Comerica report notes. “Manufacturing employment in Michigan has been stable at around 573,000 workers since the reinstatement of spring 2020 shutdowns. This is well below the pre-pandemic peak of around 633,000 workers.”
Michigan’s unemployment rate fell to a moderately tight level of 4.6% in September, still above 3.7% before the pandemic, according to the report.
Despite the challenges and August’s decline, the reading was 24.4% above the historic low of 85.7 reached in June 2020, just months after the start of the COVID-19 pandemic.