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.
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