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Comerica Bank’s Arizona Economic Activity Index decreased by 0.1 percent in April to a level of 113.6.



Comerica Bank's Arizona Index Declines

June 27, 2019
By Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index decreased by 0.1 percent in April to a level of 113.6. April’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. March’s index reading was 113.6.

Comerica Bank’s Arizona Economic Activity Index declined again in April and is now down slightly for the third consecutive month. The index components were mixed in April. Four of the nine index components increased for the month. They were nonfarm employment, unemployment insurance (inverted), housing starts and house prices. The five negative index components were industrial electricity demand, state total trade, hotel occupancy, state sales tax revenue and total enplanements. We are starting to see a negative trend develop in some of the Arizona index components. Industrial electricity demand, hotel occupancy and state sales tax revenues have now declined for at least three consecutive months. We could see further declines in our headline index in the coming months as some of the other components experience monthly volatility. However, the stories coming from Arizona’s labor market and housing sector remain positive. Job growth was up 2.7 percent year-over-year in May. Arizona new home construction has also improved after its winter soft patch. We still expect the Arizona economy to improve following the early 2019 slowdown, however the state is vulnerable to downside risk factors. A slowdown in the overall U.S. economy could negatively impact the state’s tourism and housing industries. Also, trade uncertainty remains an issue as both the U.S. and Canadian legislatures have yet to ratify the USMCA into law.

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

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