DALLAS, May 29, 2020 /PRNewswire/ -- Comerica Bank's Michigan Economic Activity Index declined in March to a level of 114.5. March's reading is 17 points, or 17 percent, above the index cyclical low of 97.9. The index averaged 117.7 points for all of 2019, 0.9 points below the index average for 2018. February's index reading was revised to 118.4.
Our state economic activity indexes are beginning to show the impact of the coronavirus pandemic on state economies in this edition which is based on data from March. The Michigan Economic Activity Index fell by 3.3 percent in March, breaking a string of three consecutive monthly gains. We expect the Michigan Index and all of our other state indexes to show further significant deterioration when the April data is available next month. In March, the only positive index component for Michigan was house prices. The eight negative components were nonfarm employment, unemployment insurance claims (inverted), housing starts, industrial electricity demand, light vehicle production, total state trade, hotel occupancy and sales tax revenue. Through April, the combination of the state's social mitigation policies and national stay-at-home guidance resulted in a huge loss of revenue for many businesses which forced business closures and layoffs. The unemployment rate for Michigan increased from an already slightly elevated 4.3 percent in March, to 22.7 percent in April as auto production ground to a halt. The April Michigan Index data will be consistent with this historically high unemployment rate. Michigan has developed a cautious plan for reopening the state economy that is not based on a specific timetable. We expect to see improvement in the May and June data. Not all shuttered businesses will re-open and not all furloughed employees will be called back.
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, with one of the largest banking center networks in Michigan, is a subsidiary of Comerica Incorporated (NYSE: CMA), a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Business Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Michigan and Texas, Comerica Bank locations can be found in Arizona, California, and Florida, with select businesses operating in several other states, as well as in Canada and Mexico.