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Comerica Bank’s Arizona Economic Activity Index decreased by 0.1 percent in February to a level of 113.8.

Comerica Bank's Arizona Index Slows

May 1, 2019
By Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index decreased by 0.1 percent in February to a level of 113.8. February’s index reading is 14 points, or 14 percent, above the index cyclical low of 99.5. The index averaged 112.8 points for all of 2018, 1.8 points above the average for 2017. January’s index reading was revised to 113.9.

The Comerica Bank Arizona Economic Activity Index moderated slightly in February, after going unchanged in January. The index components were split between gains and losses in February, with four of the nine index components positive for the month. The positive factors were nonfarm employment, unemployment insurance (inverted), house prices and industrial electricity demand. Four index components were negative in February including housing starts, state total trade, hotel occupancy and state sales tax revenue. Total enplanements were unchanged. Our Arizona Index shows that that the Arizona economy lost a little momentum at the beginning of 2019. According to the Arizona Office of Tourism, state park visitations were down 12.8 percent from a year ago in February. Also, the state’s housing sector was negatively impacted by rising mortgage rates through late 2018. Home sales fell from May 2018 through January 2019, according to ARMLS. Lower mortgage rates at the start of the year encouraged opportunistic buying in February and March, but we do not expect to see a fundamental shift in demand for Arizona housing due to lower mortgage rates this spring. Our Arizona Index is up 1.5 percent over the 12 months ending in February. This is consistent with a moderate economic expansion for the state. We expect the Arizona economy to continue to improve in 2019 anchored by steady job gains and population growth.

For a PDF version of this report, click here: Comerica Bank’s Arizona Index Slows

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