DALLAS, Oct. 31, 2019 /PRNewswire/ --Comerica Bank's Texas Economic Activity Index declined in August to 139.0. August's index reading was 44 points, or 46 percent, above the index cyclical low of 95.5. The index averaged 134.6 points for all of 2018, 5.7 points above the average for 2017. July's index reading was revised to 139.3.
The Comerica Bank Texas Economic Activity Index dipped in August, breaking a streak of seven consecutive monthly gains. The declining drilling rig count has been a consistent drag on the headline index since last December. Oil prices are not collapsing, rather, they look reasonably stable at around $55 per barrel. However, the attitude of the investment community toward shale oil drillers has changed, and the hot money has dried up, pulling the rig count down. In addition to the rig count, other negatives for August were unemployment insurance claims (inverted), total state trade, hotel occupancy and sales tax revenues. The positives for August were nonfarm employment, housing starts and house prices. The Texas economy continues to be a growth leader for the U.S. Despite reduced drilling activity, many other energy infrastructure projects are fueling the state economy. Also, Texas continues to attract businesses and workers from out of state. We expect both of those factors to remain positive. That said, Texas is not completely immune from cooling international economic conditions, nor is Texas immune from cooling conditions in other parts of the U.S. The resolution to the GM/UAW strike will allow 4,500 workers at GM's Arlington, Texas facility to get back to work, improving the economic data for Texas in November. The Arlington plant, which makes big SUVs, is reported to be amongst the most profitable for GM.
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.
SOURCE Comerica Bank