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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.