DALLAS, June 1, 2021 /PRNewswire/ -- Comerica Bank's Texas Economic Activity Index increased in March to 115.3. March's index reading was 16 percent above the recent low of 99.3 set in June 2020. The index averaged 112.1 points for all of 2020, 13.5 points below the average for 2019. February's index reading was revised to 114.2.
Our Texas Economic Activity Index increased by 1.0 percent in March, as the state economy pulled out of the February freeze-out. Eight out of nine sub-indexes were positive for the month, including nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, drilling rig count, total state trade, hotel occupancy and state sales tax revenue. Only the industrial electricity demand sub-index contracted for the month. We expect Texas to be a leading state economy pushing the overall U.S. economy to strong growth this year. It remains to be seen how the fall will develop in terms of COVID-19, but for the summer we expect to see no restrictions to the state economy due to COVID. Oil prices firmed in the second half of May to near $68 per barrel for West Texas Intermediate crude oil. The drilling rig count has improved from the extreme lows of last summer, but at 218 active rigs at the end of May, it remains well below the pre-COVID level of about 400 rigs. We expect global oil demand to continue to firm up as the U.S. and China lead the global economic recovery. OPEC has just agreed to increase output starting in July to meet growing demand. We expect the global crude oil glut to shrink this year even with increased OPEC output, supporting prices and motivating further moderate improvement in the Texas rig count. However, this is a different investment environment for oil drillers and gains will be restrained.
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), a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Commercial Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to 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. Comerica reported total assets of $86.3 billion at March 31, 2021.
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SOURCE Comerica Bank
