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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

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