Comerica Bank’s California Economic Activity Index held flat for the sixth straight month in January, at a level of 99. January’s reading is 36 percent, or 26 points, above the index cyclical low of 73. The index is even with the average for all of 2011 in the first month of the year.
“The economy of California remains hostage to a depressed housing market as shown by another flat month for our California Economic Activity Index. Some parts of the California economy are vibrant, notably the high-tech industries of Silicon Valley. However, the drag from a still-depressed housing sector is a dominant and smothering economic factor for much of the state,” said Robert Dye, Chief Economist at Comerica Bank. “Also, the state’s large government sector remains challenged by weaker than expected state tax revenues and expected cuts in federal defense spending. Slower growth in Asia through 2012 is another drag that will keep California’s economic growth in check through the first half of the year.”