Comerica Bank's Texas Index Dips

February 27, 2019 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Texas Economic Activity Index decreased by 0.1 percent in December to 136.5. December’s index reading is 41 points, or 43 percent, above the index cyclical low of 95.5. The index averaged 134.9 points for all of 2018, 6.1 points above the average for 2017. November’s index reading was revised to 136.7.

The Comerica Bank Texas Economic Activity Index decreased slightly in December, down 0.1 percent. This ended a three-month winning streak for the Texas Index. The partial federal government shutdown over December and January is still impacting the economic data stream, so we may see larger-than-normal historical revisions in the next few months as data quality improves. In December, six out of nine index components were positive, including payroll employment, housing starts, house prices, industrial electricity demand, rig count and hotel occupancy. Only three components were negatives for December. They were unemployment insurance claims (inverted), total state trade and sales tax revenues. The volatility in the unemployment insurance claims dominated the other positive factors. We expect volatility to diminish in the months ahead, allowing the Texas index to resume its positive overall track. Crude oil prices have firmed up significantly since they fell to about $43 in late December. With WTI currently near $55 per barrel, we expect energy-related infrastructure development to continue to be a positive for the Texas economy through the first half of 2019. The large number of drilled but uncompleted wells in Texas represents excess capacity for Texas oil production. Because of the excess capacity, the overall rig count may remain flat to down in the near-term even with firmer oil prices.

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

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.

Read More

Comerica Bank's Texas Index Climbs

January 31, 2019 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Texas Economic Activity Index increased by 0.4 percent in November to 136.5. November’s index reading is 41 points, or 43 percent, above the index cyclical low of 95.5. The index averaged 128.5 points for all of 2017, 4.2 points above the average for 2016. October’s revised index reading was 135.9.

The Comerica Bank Texas Economic Activity Index increased in November for the third consecutive month. Some state-level data was not available this month due to the partial federal government shutdown. We included our own estimates for housing starts and for total state trade for the month of November so that we could publish our headline index this month. Data for the other seven index components was collected and processed normally. In November eight out of nine index components were positive. They were nonfarm payrolls, unemployment insurance claims (inverted), house prices, industrial electricity demand, rig count, total trade, hotel occupancy and sales tax revenues. Housing starts declined in November. We expect that the dip in crude oil prices through 2018Q4 will result in some drag on the Texas economy, but not as much drag as we saw in 2015, when our Texas Index declined through the year. Drillers and producers have scaled back capital spending plans for 2019 and employment growth in the oil patch looks like it is slowing. A cooler U.S. and global economy this year will have an impact on Texas beyond the drag from lower oil prices. The now-ended partial federal government shutdown will not have a significant impact on the Texas Index for January. However, a noticeable drop in Consumer Confidence through December and January is bad news for the two auto production plants in Texas.

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

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.
 

Read More

Comerica Bank's Texas Index Up Slightly

January 3, 2019 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Texas Economic Activity Index increased by 0.1 points in October to 135.8. October’s index reading is 40 points, or 42 percent, above the index cyclical low of 95.5. The index averaged 128.5 points for all of 2017, 4.2 points above the average for 2016. September’s index reading was 135.7.

The Comerica Bank Texas Economic Activity Index increased slightly in October, following a small increase in September. The two-month gain in our headline index  for Texas reverses a slight two-month decline over July and August. In October, six out of nine sub-indexes were positive. They were non-farm payrolls, unemployment insurance claims (inverted), house prices, industrial electricity demand, state trade and sales tax revenue. The three negative sub-indexes were housing starts, rig count and hotel occupancy. Lower oil prices are weighing on oil producers’ plans for 2019. The Texas state rig count dipped from August through October. We expect to see further declines in the rig count into early 2019. Oil producers are paring back planned expenditures for 2019 and some drillers have canceled orders for new rigs. Cooler oil field activity in early 2019 will be a moderate weight on the overall state economy. The potential for cooler U.S. and international economic growth in 2019 completes the triple threat to the Texas economy this year. The good news is that Texas is still attracting new business and new people from outside the state. The momentum in the non-energy part of the Texas economy, which is by far the biggest part of the state economy, is significant and will keep the overall state economy expanding through early 2019.

For a PDF version of this report, click here:  Comerica Bank's Texas Index Up Slightly

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.  

Read More

Comerica Bank's Texas Index Little Changed

November 28, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Texas Economic Activity Index increased by 0.1 points in September to 135.7. September’s index reading is 40 points, or 42 percent, above the index cyclical low of 95.5. The index averaged 128.5 points for all of 2017, 4.2 points above the average for 2016. August’s index reading was revised to 135.6.

The Comerica Bank Texas Economic Activity Index was little changed in September after dipping slightly in July and August. The three-month stall in the Texas Index over the summer is largely due to declining hotel occupancy and flat housing starts. Now as oil prices slide, the drilling rig count will likely also decline further, suppressing the headline index. Fortunately, overall job growth for the state remains positive, with October showing a strong 32,000 job gain for the month. For our September Texas Index, five factors were positive, three were negative and one was unchanged. Positives were nonfarm payrolls, unemployment insurance claims (inverted), house prices, total state trade and sales tax revenue. Negatives for the month were housing starts, rig count and hotel occupancy. Industrial electricity sales were unchanged in September after easing in August. If there is good news in the oil patch it is that natural gas prices have increased from $3 per MMBtu for most of 2018, to over $4 by mid-November. However, this will not completely offset the pain from tighter margins on oil production as West Texas Intermediate crude struggles to stay above $50 per barrel. The 5 State Index graph on this page shows recent flattening in Texas, California and Michigan, all sizeable states with key industrial sectors. This should be taken as a cautionary signal for the overall U.S. economy as we head into year end.

For a PDF version of this report, click here: Comerica Bank’s Texas Index Little Changed

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.
 

Read More

Comerica Bank's Texas Index Little Unchanged

October 31, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Texas Economic Activity Index was unchanged in August to 135.8. August’s index reading is 40 points, or 42 percent, above the index cyclical low of 95.5. The index averaged 128.5 points for all of 2017, 3.9 points above the average for 2016. July’s index reading was revised to 135.8.

The Comerica Bank Texas Economic Activity Index was unchanged in August. Revised data now show a small decline in the index level in July. Over the 12 months ending in August, the Texas Index is still up by 5.9 percent, consistent with very strong state-level GDP growth for Texas over the last year. The components of the Texas Index were mixed in August. The four positive components for the month were nonfarm employment, unemployment insurance claims (inverted), housing starts and total state trade. The four negative components were house prices, industrial electricity demand, the Texas rig count and hotel occupancy. The sales tax revenue sub-index was unchanged in August. The Texas economy grew strongly through the first half of 2018. Now it looks like growth is still very good, but easing. This is consistent with the cooling seen in our Michigan and California Indexes and is consistent with the pattern of U.S. GDP growth this year. Crude oil prices have declined to about $66 per barrel at the end of October, from above $76 per barrel early in the month. We look for cooler global oil demand growth in 2019 as economic growth in the U.S., Europe and China eases. Even so, we expect oil-related investment in West Texas to continue, including infrastructure and transportation-related projects.

For a PDF version of this article, please click here: Comerica Bank's Texas Index Little Unchanged

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.
 

Read More