DALLAS, July 29, 2020 /PRNewswire/ -- Comerica
Bank's Texas Economic Activity Index decreased in May to 114.2.
May's index reading was 18.7 points 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. April's index reading was revised to
127.4.
Our state economic activity indexes for May show the historic
decline in economic activity this spring due to the coronavirus
pandemic. In addition to the effects of the epidemic-fighting
social restrictions, Texas endured
a collapse in crude oil prices which sent drillers into hibernation
and sapped revenue streams for many industries. We expect the Texas
Index to improve in the months ahead, reflecting the state's
economic reopening. However, the recent surge in coronavirus
infections has caused the state to suspend and even reverse some
reopening plans. We view the remainder of this year as a period of
heightened economic uncertainty for the U.S. and Texas economies. Eight out of nine index
components declined in May 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. As in April,
the only index component to improve was house prices. Stabilization
of oil prices, to near $40 per barrel
in June and July has been better news for the state's energy
sector, after a disastrous April. Most recently, the drilling rig
count for the state has leveled out near 100 active rigs at the end
of July. This is down sharply from the recent peak of 540 rigs from
October 2018. The state economy will
benefit from Tesla's plan to build a $1
billion facility on a 2,100 acre site near Austin. The Tesla plant will eventually employ
about 5,000 workers.
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 Incorporated (NYSE: CMA) is a financial services
company headquartered in Dallas,
Texas, and 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 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. Comerica reported total assets of
$84 billion at June 30, 2020 and celebrated its 170th
anniversary in August 2019.
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