Comerica Bank's Texas Index Increases
DALLAS, Feb. 24, 2021 -- Comerica Bank's Texas Economic Activity Index increased in December to 126.7. December's index reading was 18 percent above the recent low of 107.4 set in June 2020. The index averaged 124.3 points for all of 2020, 15.4 points below the average for 2019. November's index reading was 123.8.
Our Texas Economic Activity Index improved for the sixth consecutive month in December, showing the strongest monthly gain since last August. Eight out of nine sub-indexes increased in December. They were nonfarm payroll, unemployment insurance claims, housing starts, house prices, industrial electricity demand, drilling rig count, total state trade and state sales tax revenues. The sole declining component was hotel occupancy. There is a lot to unpack about the Texas economy this winter. First, oil prices began increasing in November and still appear to be trending up, supporting increased drilling activity. We look for ongoing firmer oil prices, but we do not subscribe to the oil market super-cycle theory looking for substantially higher prices for an extended period. Second, we are seeing a bifurcation between manufacturing-related economic data, which is generally strengthening, and services-related economic data, which may not be strengthening, at the regional, U.S. and international levels. So, a positive headline reading for any state this winter does not necessarily mean that conditions are improving for all industries in that state. In February, the Texas economy was shocked by extremely cold temperatures, electric grid problems, localized water shortages and loss of life. We expect the total damages from the weather event to be significant. We also expect the state to recover quickly since most payrolls were maintained and most property was insured.
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 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 $88 billion as of Dec. 31, 2020.
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SOURCE Comerica Bank