DALLAS, April 1, 2020 /PRNewswire/ -- Comerica Bank's Texas Economic Activity Index increased in January to 142.2. January's index reading was 47 points, or 49 percent, above the index cyclical low of 95.5. The index averaged 139.1 points for all of 2019, 3.8 points above the average for 2018. December's index reading was revised to 141.4.
Data for all of Comerica Bank's State Economic Activity Indexes pre-dates the spread of COVID-19 in the U.S. We expect to begin seeing the economic impact of the coronavirus and related mitigation programs in state-level data for March. Until the March data becomes available, we will focus our analysis on what the current data is telling us and what we believe is the most likely course for the data over the next few months. Comerica Bank's Texas Economic Activity Index improved in January for the fifth consecutive month. Six index components were positive for the month. They were nonfarm payrolls, housing starts, house prices, total state trade, hotel occupancy and state sales tax revenue. Unemployment insurance claims (inverted), industrial electricity demand and the rig count were drags in January. The Texas economy is feeling drag from three directions this spring. First, global and U.S. demand is weak due to the pandemic. Second, shelter-in-place rules are reducing local demand for goods and services. Third, the state's energy sector is being hurt by the ramp up in oil production in Saudi Arabia. Oil at $20 per barrel for an extended period will reset the energy sector in Texas. Oil producers have announced significant reductions to their capital expenditure plans for 2020. We expect to see U.S. oil production ease later this year as fewer wells are drilled and some are capped in the months ahead.
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