The manufacturing community in Michigan’s Great Southwest garnered further validation of its recent growth and the power it brings to the region when the Federal Reserve Bank of Chicago released its Midwest Economy Index for December last week. The report shows that not only did the manufacturing sector lead the way, it vaulted Michigan ahead of all other states in the Great Lakes region.
Michigan’s performance continues to outpace Indiana, Illinois, Wisconsin and Iowa in the latest report, with construction, services and consumer spending dramatically outstripping those states, as Indiana was the only other Great Lakes state to score an increased number in the index. All others showed declining numbers.
Overall, the Midwest Economy Index increased to a score of +0.06 in December from a reading of -0.02 in the previous month of November. The relative MEI score decreased to +0.12 in December from +0.19 in November, however December’s value for that relative score indicates that Midwest economic growth was slightly higher than what would typically be suggested by the growth rate of the national economy.
Michigan’s manufacturing index of +0.09 accounted for nearly half of the state’s overall performance of +0.19. That score is a major standout when you look at other states in the region, inasmuch as Indiana was the only other state with a positive rating at +0.04. Illinois nosedived by -0.08, Wisconsin trimmed to -0.04 and Iowa dipped to -0.07.
When focusing on the manufacturing sector, Michigan’s +0.09 score is especially notable since Indiana and Wisconsin were the only others with a positive score, both scoring +0.01 while Illinois was down to -0.01 and Iowa sank deeply with a score of -0.07.
The services sector in Michigan also neatly surpassed all other scores in the region posting an index of +0.07, with Indiana checking in next at +0.05. All other Great Lakes states scored negative index readings for service industries.
Michigan’s +0.03 index for construction was the only reading in positive territory in the region.
Consumer spending indicators were, on balance, down in Illinois and Indiana, but up in Iowa and steady in Michigan and Wisconsin.
The Midwest Economy Index is a monthly index designed to measure growth in nonfarm business activity in the Seventh Federal Reserve District. It serves as a regional counterpart to the Chicago Fed National Activity Index. It is a weighted average of 129 state and regional indicators measuring growth in four broad sectors of the Midwest economy — manufacturing, construction & mining, services, and consumer spending.
