The Comerica Bank Texas Economic Activity Index ticked up in March, registering its third consecutive monthly gain. The last time that the Texas Index declined was in July 2018. Over the last 12 months, the headline index is up 3.6 percent. The year-over-year gain appears to be on an improving trend after bottoming out in late 2018. In March, six out of nine index components were positive. They were nonfarm payrolls, house prices, industrial electricity demand, total state trade, hotel occupancy and state sales tax revenue. The negative factors were unemployment insurance claims (inverted), housing starts and the rig count. The strong performance of the Texas Index over the past two-and-a-half years indicates that the state has good momentum both in and out of the energy industry. Energy is a key economic driver for the state, but the majority of Texas economic activity is not directly related to the energy sector. We expect the state to continue to attract businesses and to attract new workers. We estimate population growth for the state to be around 1.4 percent this year, about double the national average pace. Strong demographic momentum will remain a tailwind for the state's non-energy economy and spur growth in people industries. An example of that growth is seen in DFW Airport's recent announcement that it will add a sixth terminal with 24 new gates as early as 2025.
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.
To subscribe to our publications or for questions, contact us at ComericaEcon@comerica.com.