Comerica Bank’s Florida Economic Activity Index increased 0.3 points in August to a level of 115.1. August’s index reading is 17 points, or 17 percent, above the index cyclical low of 98.5. The index averaged 113.1 in 2017, 1.4 points above the average for all of 2016. July’s index reading was 114.8.
The Comerica Bank Florida Economic Activity Index improved again in August, now up for the third consecutive month. Gains were widespread for the month. Eight of the nine index components were positive in August. They were nonfarm payrolls, unemployment insurance claims (inverted), housing starts, house prices, industrial electricity demand, total state trade, hotel occupancy and sales tax revenue. Total enplanements was the only index component down for the month. We saw a slowdown in some of the index components in early 2018. However it appears to be more of a returning to trend growth following a spike in activity after last year’s active hurricane season, rather than a deterioration in economic conditions. Economic fundamentals remain solid for the Florida economy. Businesses continue to benefit from the state’s competitive cost structure and federal tax cuts implemented earlier this year. Job opportunities and the lower cost of living are drawing in more workers and retirees. This boosts demand for local goods and services creating a strong virtuous cycle. As some of the index components approach pre-hurricane levels we expect to see job growth drive our index higher. Monthly job growth remained positive through September. However, Hurricane Michael’s direct hit on the Panhandle may impact Florida’s October employment data.
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