DALLAS, July 1, 2020 /PRNewswire/ -- Comerica Bank's Texas Economic Activity Index decreased in April to 127.5. April's index reading was 32 points, or 34 percent, above the index cyclical low of 95.5. The index averaged 139.2 points for all of 2019, 3.8 points above the average for 2018. March's index reading was revised to 140.0.
Our state economic activity indexes for April are showing the full impact of the coronavirus pandemic on state economies. In addition to the negative impact of the coronavirus pandemic, the Texas economy has felt the related, but separate, impact of a dramatic shift in the global energy market. Eight out of nine components declined in April for Texas. They were nonfarm employment, unemployment insurance claims (inverted), housing starts, industrial electricity demand, drilling rig count, total state trade, hotel occupancy and state sales tax revenues. Only the house price sub-index improved in April. We expect to see an overall improvement in the Texas Index in the months ahead due to a mix of factors. First, Texas has rolled back some restrictions on businesses. Also, demand for Texas goods and services is improving outside of Texas as U.S. and international conditions steady. The combination of increased demand and output agreements are working to rebalance the global oil market. Recently, higher oil prices have stabilized the drilling rig count. However, Texas, along with some other states, has seen an increase in COVID-19 cases through early summer. Some retail establishments have been shut down again. There is a risk that Texas may need to revisit stricter social mitigation policies if hospital capacity is strained. That could result in another meaningful drag on the Texas economy.
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 Commercial 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.
SOURCE Comerica Bank