DALLAS, Aug. 31, 2018 /PRNewswire/ -- Comerica
Bank's Texas Economic Activity Index increased 1.1 points in June
to 136.1. June's index reading is 41 points, or 43 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 134.6.
The Comerica Bank Texas Economic Activity Index increased for
the third consecutive month in June. The combination of a strong
U.S. economy and a strong oil industry is potent for Texas. Also, the recently announced new trade
deal between the U.S. and Mexico
will remove some uncertainty for Texas businesses. In June, six out of nine
index components were positive. They were nonfarm payrolls,
unemployment insurance claims (inverted), industrial electricity
demand, drilling rig count, total state trade and sales tax
revenues. Housing starts and hotel occupancy were negatives in
June, while house prices were neutral. The June 2018 Texas Index is 6.5 percent above the
June 2017 level, indicating strong
state-level GDP growth over the 12 month interval. We anticipate
that Texas will show substantially
greater than the U.S. real GDP growth rate of 2.9 percent from
2017Q2 through 2018Q2. Conditions look promising for the rest of
the year. The price for West Texas Intermediate crude oil has
stabilized in the range of $65-$70 per barrel
since May. We anticipate a year-end price of about $75 per barrel as Iranian oil production falters
due to U.S. sanctions. Even in the absence of near-term price
gains, the Texas oil industry is
set to flourish. Numerous pipeline and related projects are
underway to move newly invigorated West
Texas production to markets. The Midland-Odessa area remains in the grip of dramatic
economic expansion fueled by oil.
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.
To subscribe to our publications or for questions, contact us at
ComericaEcon@comerica.com. Archives are available at
http://www.comerica.com/insights. Follow us on Twitter:
@Comerica_Econ.
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SOURCE Comerica Bank