DALLAS, Nov. 26, 2019 /PRNewswire/ -- Comerica Bank's Texas Economic Activity Index increased in September to 139.5. September's index reading was 44 points, or 46 percent, above the index cyclical low of 95.5. The index averaged 134.6 points for all of 2018, 5.7 points above the average for 2017. August's index reading was revised to 139.1.
The Comerica Bank Texas Economic Activity Index improved in September after dipping in August. The Texas Index has improved in 16 out of the last 18 months. The state economy is definitely being pulled in two directions at once. Oil field activity is cooling because investors are dissatisfied with their returns. The service sector continues to grow, fueled by an ongoing stream of corporate relocations. Charles Schwab has just announced plans to move its headquarters from high cost San Francisco to its existing campus in the Dallas suburbs. In September, six out of nine index components were positive. They were nonfarm payrolls, unemployment insurance claims (inverted), housing starts, house prices, total state trade and state sales tax revenues. Negatives for September were industrial electricity demand, the drilling rig count and hotel occupancy. The rig count index has now declined for 10 consecutive months. Manufacturing activity in Texas has been hurt by declining oil field activity and it was also weighed down by the now-resolved GM/UAW strike. According to the Federal Reserve Bank of Dallas, manufacturing activity in Texas contracted slightly in November as the new orders index remained negative for the second month in a row. We expect economic activity for the state to cool next year, but remain stronger than the national average due to the diversified state economy.
The Texas Economic Activity Index consists of nine variables, as follows: nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house price index, industrial electricity sales, Texas rotary rig count, total trade, hotel occupancy and sales tax revenue. All data are seasonally adjusted. Nominal values have been converted to constant dollar values. Total index levels are expressed in terms of three-month moving averages.
Comerica Bank is a subsidiary of Comerica Incorporated (NYSE: CMA), the largest U.S. commercial bank headquartered in Texas, strategically aligned by three business segments: The Business Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to a local banking center network throughout Dallas-Fort Worth, Houston, Austin, San Antonio and Kerrville, Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico.