DALLAS, Aug. 1, 2018 /PRNewswire/ -- Comerica Bank's Texas Economic Activity Index increased 0.7 points in May to 134.7. April's index reading is 39 points, or 41 percent, above the index cyclical low of 95.5. The index averaged 128.5 points for all of 2017, three and nine-tenths points above the average for 2016. May's index reading was revised to 133.7.
The Comerica Bank Texas Economic Activity Index increased again in May. State economic activity is expanding strongly after stalling through most of 2015 and 2016. A vigorous U.S. economy, favorable oil prices and ongoing in-migration to Texas will keep the Texas economy growing through the rest of this year. Eight out of nine index components increased in May, including nonfarm employment, initial claims for unemployment insurance (inverted), housing starts, industrial electricity demand, rig count, state trade, hotel occupancy and sales tax revenues. Only the house price index eased in May. Housing markets nationwide appear to be cooling this summer. However, with strong economic and population growth in Texas, we expect that housing markets in the major Texas metro areas will remain tight, supporting ongoing price gains. According to the Case-Shiller data, Dallas area house prices increased by 0.2 percent in May, after seasonal adjustment, and are up 5.6 percent over the previous 12 months. Texas job growth has stepped up after sagging in 2015 and 2016. Through the first six months of this year, Texas has generated a healthy average of 37,000 net new jobs per month. Uncertainty about international trade is an important risk factor for the state economy. Mexican President-elect Andres Manuel Lopez Obrador has indicated that he would like to see a swift conclusion to the ongoing NAFTA negotiations.
The Texas 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, Texas rotary rig count, total trade, hotel occupancy and sales tax revenue. All data are seasonally adjusted. Nominal values have been converted to constant dollar values. Total index levels are expressed in terms of three-month moving averages.
Comerica Bank is a subsidiary of Comerica Incorporated (NYSE: CMA), the largest U.S. commercial bank headquartered in Texas, 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 a local banking center network throughout Dallas-Fort Worth, Houston, Austin, San Antonio and Kerrville, Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico.