Comerica Bank’s Texas Economic Activity Index dipped in July, down 0.9 percentage points to a level of 90.3. July’s reading is 18 points, or 24 percent, above the index cyclical low of 72.8. The index averaged 97.5 points for all of 2015, seven and three-fifths points below the average for full-year 2014. June’s index reading was 91.2.
“Our Texas Economic Activity Index dipped again in July due to a sizeable drop in the exports sub-index. Texas exports obviously include crude oil, petroleum products and natural gas. With oil prices low, crude oil production has dropped significantly. According to the Texas Railroad Commission, total oil production in Texas in July dipped to 85.3 million barrels, down 21 percent from the peak of 108.3 million barrels in December 2014. So lower economic activity in the state is a direct result of the reset in global oil markets. Also, non-petroleum exports from Texas are facing lackluster demand from the rest of the U.S., indicated by weak U.S. GDP growth through the first half of this year. International demand for Texas products is also lackluster due to the subdued economic performance of many of our trading partners and due to the relatively strong U.S. dollar, which makes Texas products more expensive. Fortunately, the increasingly diverse economy of Texas is still adding new jobs,” said Robert Dye, Chief Economist at Comerica Bank. “Texas added 34,000 jobs in July, close to its average from 2011-2014, when oil field activity was surging.”
For a PDF version of the Texas Economic Activity Index click here: TexasIndex_0916.