Comerica Bank’s California Economic Activity Index was flat in November, at a level of 101. November’s reading is 12 percent, or 11 points, above the index cyclical low of 90. Year-to-date the index has averaged 102, two points above the 100 average for all of 2010.
“Economic activity in California remains mixed as Silicon Valley continues to generate new jobs, but the large government sector in the state is still retrenching and housing markets in many areas are still depressed. Optimism among small business has begun to improve and that will support additional hiring, but we are not at the stage yet where we can say that businesses are overall truly optimistic,” said Robert Dye, Chief Economist at Comerica Bank. “California faces an ongoing headwind from weak state and local government spending and also a growing headwind from increasingly constrained federal government spending. House prices in Los Angeles and San Francisco were still falling as of last November and are expected to remain soft through 2012.”