Comerica Bank’s Texas Economic Activity Index declined slightly in March, down 0.2 percentage points to a level of 91.9. March’s reading is 19 points, or 26 percent, above the index cyclical low of 72.8. The index averaged 97.7 points for all of 2015, seven and three-fifths points below the average for full-year 2014. February’s index reading was 92.1.
“Our Texas Economic Activity Index declined again in March, down for 16 out of the last 17 months. Weakness in the index stems from the reset to the Texas oil and gas industry due to very low commodity prices. In recent weeks, we have seen some firming in both crude oil and natural gas prices. If the current price regime is stable, with oil near $50 per barrel, then we would expect drilling rig counts to stabilize this year, and that overall business investment in crude oil and natural gas projects will stabilize, too, by year end. We already see in our Texas Index a slower rate of decline through the first three months of 2016, compared with the second half of 2015. Five out of eight index components were positive for March, including nonfarm employment, exports, unemployment insurance claims (inverted), house prices and state sales tax,” said Robert Dye, Chief Economist at Comerica Bank. “Negative index components for March were housing starts, rig count and hotel occupancy.”
For a PDF version of the Texas Economic Activity Index click here: TexasIndex_0516.