Comerica Bank’s California Economic Activity Index was unchanged in June, at a level of 102. June’s reading is one point below the 104 average for all of 2010, and eight points, or nine percent, above the index cyclical low. Year-to-date the index has averaged 103.
The California Economic Activity Index stalled at a level of 102 for the three months of the second quarter of 2011.
“Spillover effects from the Japan earthquake combined with weak demand growth from the rest of the U.S. to leave California with only limited economic momentum at the end of the second quarter,” said Robert Dye, Chief Economist at Comerica Bank. “A rebound in automotive production is already visible in recent U.S. data. This will help to stabilize southern California durable goods manufacturers in the current third quarter. However, stress in financial markets due to both U.S. and Euro-Zone fiscal conditions threatens to put a damper on economic growth in the second half of 2011. Consumers remain tentative and housing markets remain weak, burdened by the still-elevated rate of delinquencies and foreclosures. A resurgent Silicon Valley remains a bright spot for the state economy but some high-tech industries are vulnerable to cooler markets and new restraints to government spending.”