Slipping on oil
In April, Comerica Bank’s Texas Economic Activity Index eased once more, decreasing 2.7% to a level of 98.5. April’s reading is 26 points/36%, above the index cyclical low of 72.9. The index averaged 105.1 points for all of last year, four and four fifths points above the average for full year 2013. March’s index reading was 101.2.
Robert Dye, Chief Economist, Comerica Bank said, “the Texas economy continues to feel the pull from lower oil prices. Our Texas Economic Activity Index has now declined for six consecutive months, beginning in November of 2014. Fortunately, oil prices have been relatively stable near US$60/bbl for the last two months. Concerns about ongoing strong global production and floating storage may weigh on prices this summer. But on the other hand, you have a greatly reduced US rig count, depletion of existing wells and increased gasoline demand by more confident US consumers, which are all supportive of oil prices. Job creation in Texas bounced back in May, but other indicators are showing the impact of reduced energy sector activity.”
Activity Index
The Texas Economic Activity Index is made up of eight variables: non-farm payrolls, exports, hotel occupancy rates, continuing claims for unemployment insurance, housing starts, sales tax revenues, home prices and the Baker Hughes rotary rig count. All data are seasonally adjusted, as necessary, and indexed to a base year of 2008. Nominal values have been converted to constant dollar values. Index levels are expressed in terms of three month moving averages.
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