Domestic Auto Sector Nears Cyclical Peak: New Growth to be Driven by Nonmanufacturing Industires
Comerica Bank's Michigan Activity Index improved in February, increasing 0.5 percentage points to a level of 127.0. February’s reading is 53 points, or 71 percent, above the index cyclical low of 74.0. "With the domestic auto sector near its cyclical peak and international demand for Michigan's exports soft, the Michigan economy is in a new phase, where growth will be driven by nonmanufacturing industries," said Robert Dye, the bank's chief economist, in a news release. "Steady gains in nonmanufacturing employment and improving real estate conditions will be the hallmarks of the Michigan economy for the remainder of the year." This is a very typical pattern. The key will be to hand on to manufacturing gains in the late stages of this cycle.