Comerica Bank's Arizona Index Inches Up

October 31, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index increased by 0.2 percentage points in August to a level of 112.7. August’s index reading is 13 points, or 13 percent, above the index cyclical low of 99.5. The index averaged 111.1 points for all of 2017, one point above the average for 2016. The July index reading was 112.5.

The Comerica Bank Arizona Economic Activity Index inched up in August after breaking a string of five consecutive monthly gains in July. Seven out of nine sub-indexes were positive in August. They were nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, total state trade, hotel occupancy, and state sales tax revenue. The two negative components were industrial electricity demand and enplanements. Arizona job growth continued to accelerate through September, with the labor market looking stronger in 2018 than it did in 2017. Through the first nine months of the year, 9,050 jobs per month have been added, on average. However, the state unemployment rate has remained largely unchanged at 4.7 percent in September, which is still well above the state’s low of 3.6 percent from mid-2007. Of note, the Tucson metro area, which has traditionally trailed growth in Phoenix, has now regained all the jobs it lost during the recession between 2007 and 2011. Meanwhile, the resolution of the U.S.-Mexico-Canada Trade Agreement, which remains to be ratified by each country, removes some uncertainty for Arizona businesses. Mexico and Canada are the state’s two largest trade partners, accounting for 36 percent and 10 percent of its export purchases, respectively.

For a PDF version of this report, click here: Comerica Bank's Arizona Index Inches Up

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.
 

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Comerica Bank's Arizona Index Dips

September 27, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index decreased 0.2 percentage points in July to a level of 112.5. July’s index reading is 13 points, or 13 percent, above the index cyclical low of 99.5. The index averaged 111.1 points for all of 2017, one point above the average for 2016. The June index reading was 112.7.

The Comerica Bank Arizona Economic Activity Index dipped in July, breaking a string of five consecutive monthly gains. This is the Arizona Index’s first decline since April 2017. The components had been mixed in June however, which suggested that the Arizona economy was vulnerable to the cooling we are now observing in July. Four out of nine sub-indexes were positive in July. They were nonfarm employment, unemployment insurance claims (inverted), house prices and hotel occupancy. The five negative components were housing starts, industrial electricity demand, total state trade, state sales tax revenue, and enplanements. Arizona job growth in 2018 continues to look firmer than it did in 2017 and that is a strong positive. Through the first seven months of the year, 6,840 jobs per month have been added, on average. The state unemployment rate remained unchanged at 4.6 percent in August, which is still well above the low of 3.6 percent from mid-2007. According to the Arizona Republic, Arizona is second only to Florida in states attracting retirees, with the Phoenix metro area home to five of the top 10 destination cities for new residents aged 60 or older. Arizona’s sunshine, comparatively low taxes and affordable housing prices are expected to remain significant draws for thousands of baby boomers as they reach retirement age.

For a PDF version of this article, please click here: Comerica Bank's Arizona Index Dips

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank's Arizona Index Extends Gains

August 29, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index increased 0.2 percentage points in June to a level of 112.7. June’s index reading is 13 points, or 13 percent, above the index cyclical low of 99.5. The index averaged 111.1 points for all of 2017, one point above the average for 2016. The May index reading was 112.5.

The Comerica Bank Arizona Economic Activity Index registered its fifth consecutive monthly gain in June. The Arizona Index has not declined since April 2017. The components were mixed in June however, suggesting that the Arizona economy is still vulnerable to cooling. Four out of nine sub-indexes were positive in June. They were nonfarm employment, house prices, hotel occupancy, and state sales tax revenue. The five negative components were unemployment insurance claims (inverted), housing starts, industrial electricity demand, total state trade, and state sales tax revenue. Arizona job growth in 2018 continues to look firmer than it did in 2017. Through the first half of the year, 7,250 jobs per month have been added, on average. This helped to lower the state unemployment rate to 4.6 percent in July, still well above the low of 3.6 percent from mid-2007. Hopes for a resolution this year to NAFTA renegotiations continue to rise as the U.S. and Mexico struck a preliminary accord on trade earlier this week. According to the Arizona Republic, about one third of Arizona’s international exports and imports are tied to trade with Mexico. Affected industries include semiconductors, logistics, agriculture, and tourism, while some prominent Arizona corporations have operations in Mexico. Despite positive bilateral developments between the U.S. and Mexico, it is still uncertain how or if Canada, Arizona’s second largest trade partner, will join the accord.

For a PDF version of this article, please click here: Comerica Bank's Arizona Index Extends Gains

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank's Arizona Index Climbs

August 1, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index increased 0.1 percentage points in May to a level of 112.5. May’s index reading is 13 points, or 13 percent, above the index cyclical low of 99.5. The index averaged 111.1 points for all of 2017, one point above the average for 2016. The April index reading was 112.4.

The Comerica Bank Arizona Economic Activity Index registered its fourth consecutive monthly gain in May. The Arizona Index has not declined since April 2017. The components were mixed in May however, suggesting that the Arizona economy is still vulnerable to cooling. Five out of nine sub-indexes were positive in May. They were nonfarm employment, house prices, industrial electricity demand, hotel occupancy and enplanements. The four negative components were unemployment insurance claims (inverted), housing starts, total state trade and state sales tax revenue. So far in 2018, Arizona job growth looks a little firmer than it did in 2017. Through the first half of the year, 7,650 jobs per month have been added, on average. This helped to lower the state unemployment rate to 4.7 percent in May and June, still well above the low of 3.6 percent from mid-2007. Even though national home construction data was soft through early summer, Phoenix-area construction has been strong. According to the Arizona Republic, new houses are being built this summer at the fastest pace in 10 years. The Case-Shiller home price data shows that Phoenix-area house prices were up 7.3 percent in May over the previous 12 months. Hopes for a resolution this year to the stalled NAFTA negotiations are rising. Almost half of Arizona international exports go to Canada and Mexico, with Mexico being Arizona’s top trading partner.


For a PDF version of this article, please click here: Comerica Bank's Arizona Index Climbs

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank's Arizona Index Trends Up

June 27, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Index Trends UpComerica Bank’s Arizona Economic Activity Index increased 0.4 percentage points in April to a level of 112.4. April’s index reading is 13 points, or 13 percent, above the index cyclical low of 99.5. The index averaged 111.1 points for all of 2017, one point above the average for 2016. The  March index reading was revised to 112.0.

The Comerica Bank Arizona Economic Activity Index improved again in April, now up for the third consecutive month. Five out of nine index components were positive in April including nonfarm payrolls, house prices, total state trade, hotel occupancy and state taxable sales. The four negative components for the month were unemployment insurance claims (inverted), housing starts, industrial electricity consumption and enplanements. The Arizona economy continues to trend up in the first half of 2018, anchored by recent momentum in the state’s labor market. Employment which is the strongest indicator of state economic activity was up again in April and May. The state has now added 40,000 jobs in the first five months of 2018, which is the strongest start to a year since 2006. Job gains are concentrated in the Phoenix metropolitan area which has recorded 19 consecutive months of job growth. The labor market in southern Arizona still remains weaker than in past cycles, but it is improving. The Tucson metropolitan area has now posted two consecutive monthly job gains in April and May. The strong growth seen in northern Arizona is driving demand for houses and keeping inventories of houses for sale tight. According to the Arizona Regional Multiple Listing Services, the months’ supply of homes for sale in the Phoenix area ticked down to a very low 2.1 months in May. Tight supply will support new construction projects this year.

 

For a PDF version of this report, click here: Arizona Index June 2018 

 

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations.  The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team.  We are not offering or soliciting any transaction based on this information.  We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation.  Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed.  Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information. 

 

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Comerica Bank’s Arizona Index Improves

June 4, 2018 by By Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index increased 0.1 percentage points in March to a level of 111.9. March’s index reading is 12 points, or 12 percent, above the index cyclical low of 99.5. The index averaged 111.1 points for all of 2017, one point above the average for 2016. The February index reading was 111.8.

The Comerica Bank Arizona Economic Activity Index improved slightly in March. Six out of nine index components were positive in March including nonfarm payrolls, unemployment insurance claims (inverted), housing starts, house prices, total state trade and enplanements. The three negative components for the month were industrial electricity consumption, hotel occupancy and state taxable sales. Our Arizona index stalled from December through February. During this time, monthly job growth continued to improve, boosted by gains in the state’s construction, manufacturing and private services sectors. The sustained job growth helped to counter declines in our hotel occupancy and sales tax indexes, leading to the three consecutive monthly readings of 111.8. The Arizona Index is increasing again, signaling an ongoing moderate expansion for the Arizona economy heading into the second half of 2018. The outlook for the state’s housing sector also remains positive. The three consecutive monthly increases in our housing starts index are further evidence of healthy construction activity, particularly around the Phoenix metropolitan area. Arizona home prices continue to improve and year-over-year growth has accelerated in recent months. We expect the state’s housing market to continue to benefit from the state’s relatively high affordability which will boost in-migration of potential workers and baby boomers entering retirement.

Explanatory Note:

The Arizona 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, total trade, hotel oc-cupancy, state taxable sales and total enplanements. All data are seasonally adjusted. Nominal values have been con-verted to constant dollar values. Index levels are expressed in terms of three-month moving averages.

Comerica operates full-service banking centers throughout Maricopa County, including locations in Phoenix, Avondale, Goodyear, Mesa, Peoria, Scottsdale, Surprise and Tempe. In addition to Arizona, Comerica locations can be found in its headquarters state of Texas, as well as in 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.

For a PDF version of this report click here: Comerica Arizona Index

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Arizona Index Stalled

April 26, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index was unchanged in February at a level of 111.8. February’s index reading is 12 points, or 12 percent, above the index cyclical low of 99.5. The index averaged 111.1 points for all of 2017, one point above the average for 2016.

The Comerica Bank Arizona Economic Activity Index was unchanged again in February, at 111.8 for the fourth consecutive month. After good economic momentum through last fall, Arizona entered 2018 with a flat economy. We expect our Arizona Index to begin tracking north again soon, supported by good job growth in early 2018, and positive net-migration to the state. Six out of nine index components were positive in February. They were nonfarm payrolls, unemployment insurance claims (inverted), house prices, industrial electricity demand, state sales tax collections, and enplanements. Only three components were negative for the month, but they were enough to hold the overall index flat. The negative components were housing starts, total state trade and hotel occupancy. We expect housing starts to be a more consistent positive factor for the state economy this year. Housing supply is tight in most major markets. States like Arizona, where there is available space for new housing with reasonable land prices, will benefit as housing affordability declines elsewhere. International trade is a wildcard for Arizona and other border states in 2018. We expect the NAFTA negotiations to conclude soon without a major disruption to U.S./Mexico trade. Hotel occupancy increased in January, February and March, so that will be a positive factor in our March report, due out next month. Payroll jobs also increased in March, supporting our expectation for an increase in the Arizona Index next month.

For a PDF version of this report click here: AZ-Index-0418.

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.
 

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Comerica Bank’s Arizona Index Unchanged

March 28, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index was un-changed in January at a level of 111.8. January’s index reading is 12 points, or 12 percent, above the index cycli-cal low of 99.5. The index averaged 111.1 points for all of 2017, one point above the average for 2016. December’s index reading was revised to 111.8.

The Comerica Bank Arizona Economic Activity Index was unchanged again in January, now showing three consecutive months at 111.8. Seven out of nine sub-indexes were positive for the month. They were nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, industrial electricity demand, total state trade and enplanements. Hotel occupancy and state sales tax revenues were down in January. The fact that the majority of the index components were positive in January is a good sign. It also reflects the weighting scheme for the nine factors that drive our Arizona Index. Importantly, job growth for the state is picking up again after stalling last fall. The employment data through February shows three consecutive months of gains, so that will be a positive for the index next month. Both house prices and the rate of new home construction are also increasing for the state. So the Arizona economy is still showing positive signals in the historically important housing industry. We do not have reliable high frequency indicators for net migration, but that is another important factor for the state. Our assumption is that Arizona continues to attract retirees and others seeking a low cost alternative from nearby California. A negative for the state is apparent in the long-term trend in industrial electricity demand. After peaking in mid -2015, industrial electricity demand has declined steadily, showing a weakening of industrial activity in the state.

For a PDF version of this report click here: AZ-Index-0318.

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Arizona Index Improves | December 2017

February 28, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index grew 0.1 percent in December to a level of 111.6. December’s index reading is 12 points, or 12 percent, above the index cyclical low of 99.5. The index averaged 110.8 points for all of 2017, four-fifths of a point above the average for 2016. November’s index reading was 111.5. 

The Comerica Bank Arizona Economic Activity Index improved in December for the fifth consecutive month. Six of the nine indicators were positive for the month, including unemployment insurance claims (inverted), house prices, industrial electricity demand, state total trade, hotel occupancy and enplanements. Both housing starts and state sales tax revenue eased in December, while payroll employment was essentially unchanged. The Arizona economy showed more consistent momentum through the second half of 2017, and we believe that will carry over into the first half of 2018. In addition to its own growth factors, Arizona will continue to benefit from households and businesses seeking relief from costlier locations, including California. Net migration indicators from the Bureau of Census, the IRS and Atlas Van Lines show a consistent pattern. Net migration for Arizona was strongly positive prior to 2008. With the onset of the Great Recession, net migration to Arizona fell to zero or below (indicating net out-migration) from about 2008 through 2015. After 2015, the net migration numbers turned positive again. The most recent data, through 2017, maintains that positive trend. The 2020 Census will be very important for Arizona. We expect the 2020 Census numbers to confirm that households, on net, are moving back into the state. Stronger net-migration and population growth are central to Arizona’s long term economic outlook. 

For a PDF version of this report click here: AZ_Index_0218

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Arizona Index Improves

February 1, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index grew 0.3 percent in November to a level of 111.5. November’s index reading is 12 points, or 12 percent, above the index cyclical low of 99.5. The index averaged 110.0 points for all of 2016, one and one-tenth point above the average for 2015. October’s index reading was 111.2.

The Comerica Bank Arizona Economic Activity Index im-proved again in November. The index is now up for the third consecutive month. Eight of the nine indicators were positive for the month, including nonfarm payrolls, unemployment insurance claims (inverted), housing starts, house prices, state total trade, hotel occupancy, state sales tax revenues and enplanements. The one indicator that was negative in November was industrial electricity demand. The Arizona economy showed steady moderate growth through the middle of 2017. Our index shows a modest acceleration in the state economy in Q4. Sup-porting this growth was an expansion in Arizona payrolls, up by 35,000 jobs in 2017. The majority of the job gains were in high-paying sectors such as construction, manufacturing, finance and insurance, business technical services and healthcare. However, most of the gains were concentrated in the Phoenix metropolitan statistical area. The Phoenix MSA accounts for about 75 percent of the Arizona economy. Employment gains in the Tucson MSA in 2017 were weaker than for Phoenix. The Tucson MSA makes up about 12 percent of Arizona’s total economy. We expect to see moderate growth in the Arizona economy in 2018, supported by higher real estate prices and ongoing hiring, primarily in Phoenix. Phoenix house prices were up by 5.6 percent in November, over the previous 12 months.

For a PDF version of this report click here: AZ_Index_0118

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Arizona Index Increases

January 3, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index grew 0.3 percent in October to a level of 111.2. October’s indexreading is 12 points, or 12 percent, above the index cyclicallow of 99.5. The index averaged 110.0 points for all of 2016, one and one-tenth point above the average for2015. September’s index reading was 110.9.

The Comerica Bank Arizona Economic Activity Index for October increased again after gaining in September. The October increase was a moderately strong 0.3 percent, showing that the Arizona economy gained momentum inlate 2017 after stalling earlier in the year. Also, in October, all nine Arizona Index components increased. This was the first across-the-board gain in the index since January 2015. One cautionary note comes from nonfarm payroll gains,which were inconsistent through 2017. Still, there are positive signals from other components. Unemployment insurance claims continue to improve. Housing starts showan increasing trend through last fall. House prices are consistently climbing. Industrial electricity demand is up froma summer low. Total state trade is gradually improving. Hotel occupancy is also on an increasing trend. State sales tax receipts are up. Enplanements reversed a decliningtrend in October. We look for moderate gains in the Arizona economy through 2018, supported by a healthy U.S.economy and the ongoing retirement of baby boomers.Arizona remains an attractive low-cost retirement locationfor many baby boomers, including those from nearby high-priced California. Because Arizona’s economy has historically been fueled in large part by residential construction, the prospect of moderately increasing mortgage interestrates this year represents a downside risk for the state.

For a PDF version of this report click here: AZ_Index_1217

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Arizona Index Rises

October 31, 2017 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index rose 0.1 percent in August to a level of 110.8. August’s index reading is 11 points, or 11 percent, above the index cyclical low of 99.5. The index averaged 110.0 points for all of 2016, one point above the average for 2015. July’s index reading was 110.7.

The Comerica Bank Arizona Economic Activity Index for August 2018 increased slightly by 0.1 percent after easing in July based on revised data. The headline state index remains essentially stalled near the level first seen in November 2016. Fortunately, payroll job growth for Arizona improved in August and September, and this implies improving overall momentum for the state this fall, but the complete dataset through August still looks tepid. The August index values show four out of nine indicators improving. They were nonfarm employment, house prices, total state trade, and hotel occupancy. Five indicators declined for the month. They were unemployment insurance claims (inverted), housing starts, industrial electricity demand, state sales tax revenue and enplanements. Housing starts remain well below the late-2016 peak, showing that residential construction is simply not driving the state economy the way it has in the past. Although house prices are relatively firm, up 5.8 percent for the year ending in August for the Phoenix market according to the case-Shiller data. This is just a little below the national average increase of 6.1 percent for the year ending in August. We look for moderate positive momentum for the state through year end. An important economic risk for Arizona is how home sales hold up in a rising interest rate environment through the end of this year and into 2018.

For a PDF version of this report click here: AZ_Index_1017.

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank's Arizona Index Increases

June 29, 2017 by Robert A. Dye Ph.D, Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index rose 0.8 percentage points in April to a level of 113.0. April’s index reading is 36 points, or 47 percent, above the index cyclical low of 77.0. The index averaged 110.3 points for all of 2016, three and one-half points above the average for 2015. March’s index reading was 112.2.  

“The Comerica Bank Arizona Economic Activity Index increased in April after dipping in March. Gains in
April were broad-based with seven out of eight index components positive. They were nonfarm employment, state exports, unemployment insurance claims (inverted), housing starts, house prices, hotel occupancy and enplanements. Only state sales tax revenues eased in April. Job growth has been choppy since the end of 2016, but it is still above the U.S. average, up 1.9 percent for the year ending in April,” said Robert Dye, Chief Economist at Comerica Bank. “The weak peso relative to the dollar has hurt trade with Mexico and cross-border retail sales for Arizona merchants. This year the peso has been gaining strength, which is a positive for the Arizona economy.” 

For a PDF version of the complete Arizona Economic Outlook, click here: Arizona_Index_0617.pdf

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Comerica Bank’s Arizona Index Ticks Up

January 31, 2017 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index rose 0.1percent in September to a level of 110.9. September’s indexreading is 11 points, or 11 percent, above the indexcyclical low of 99.5. The index averaged 110.0 points for allof 2016, one and one-tenth point above the average for2015. August’s index reading was 110.8.

The Comerica Bank Arizona Economic Activity Index forSeptember ticked up by 0.1 percent after revised datashowed essentially no change for August. The Arizonastate index has remained range bound since last May. Arizona’smonthly nonfarm payrolls data has been volatilethis year, posting losses in four out of 10 months. Lookingthrough the noisy monthly data, it appears that the paceof Arizona payroll growth is moderating. Year to date, Arizonahas added a net 27,100 jobs as of October. This isabout half the pace of 2016 and 2015. The September Arizonasub-index values were mostly positive. Six out of ninesub-indexes were positive, including nonfarm payrolls, unemploymentinsurance claims (inverted), housing starts,house prices, industrial electricity demand and state salestax revenues. The two negative sub-indexes were totalstate trade and enplanements. The hotel occupancy subindexwas unchanged for the month. The Arizona economystill has some room to run in this cycle. Recent gains inthe state’s labor market have been enough to pull Arizona’sunemployment rate down to 4.5 percent in October.Tighter labor markets, along with the increase in Arizona’sminimum wage from $10.00 per hour to $10.50 per hour,effective in January, will help to boost incomes in 2018.Higher incomes, along with climbing home prices, will supportstate household spending through 2018.

For a PDF version of this report click here: AZ_Index_1117

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

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Comerica Bank’s Arizona Index Gains Momentum

January 26, 2016 by Kyle Grace

Comerica Bank’s Arizona Economic Activity Index grew in November, increasing 0.9 percentage points to a level of 108.5. November’s index reading is 32 points, or 41 percent, above the index cyclical low of 77.0. The index averaged 99.7 points for all of 2014, four and one-fifth points above the average for full-year 2013. October’s index reading was 107.6.

“Our Arizona Economic Activity Index increased in November for the third consecutive month. Index components show a broad base of support with seven out of eight components either increasing or staying the same. Only state exports decreased, similar to a pattern seen in other states. We suspect that the strong dollar is an increasing headwind for most states. However, improving conditions for U.S. households are a major support to destination economies, including those in Arizona. Solid U.S. job gains, moderate-to-strong house price growth and low energy prices are combining to boost seasonal tourism,” said Robert Dye, Chief Economist at Comerica Bank. “We look for ongoing gains for Arizona in 2016, boosted by leisure and hospitality industries and by residential construction.”

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For a PDF version of the Arizona Economic Activity Index click here: ArizonaIndex_0116.

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Comerica Bank’s Arizona Index Marks Second Consecutive Gain

January 5, 2016 by Kyle Grace

Comerica Bank’s Arizona Economic Activity Index grew in October, increasing 0.5 percentage points to a level of 107.6. October’s index reading is 31 points, or 40 percent, above the index cyclical low of 77.0. The index averaged 99.7 points for all of 2014, four and one-fifth points above the average for full-year 2013. September’s index reading was 107.1.

“Our Arizona Economic Activity Index increased again in October after turning positive in September. October performance was strong with seven out of eight index components showing gains. Only state exports were negative for the month. We look for the state’s economy to gradually build momentum through 2016, supported by tourism, retirement relocations and West Coast businesses looking for lower-cost locations. Phoenix house prices were up 5.7 percent in October over the previous 12 months, a little better than the U.S. average according to the Case-Shiller data,” said Robert Dye, Chief Economist at Comerica Bank. “We expect gasoline prices to remain low through 2016, helping Arizona households and supporting the state’s important tourism industry.”

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For a PDF version of the Arizona Economic Activity Index click here: ArizonaIndex_1215.

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