Comerica Bank's Texas Index Declines

Rhea-AI Summary

Comerica Bank's Texas Economic Activity Index fell to 114.1 in February, down from 114.6 in January, marking the end of a seven-month upward trend. The decline was attributed to a severe winter freeze impacting the state's economy, causing damage estimates exceeding $200 billion. Despite this setback, six components of the index, including nonfarm employment and house prices, remained positive. The bank anticipates robust economic growth in Texas for the remainder of the year, backed by adjustments to its economic activity methodology.

Positive

• Six positive index components including nonfarm employment and house prices.
• Resumption of positive economic momentum anticipated in Texas.
• Total assets reported at $86.3 billion as of March 31, 2021.

Negative

• Texas Economic Activity Index declined, breaking a seven-month winning streak.
• Severe winter freeze caused damage estimates over $200 billion.

DALLAS, April 28, 2021 /PRNewswire/ -- Comerica Bank's Texas Economic Activity Index decreased in February to 114.1. February's index reading was 15 percent above the recent low of 99.5 set in June 2020. The index averaged 112.1 points for all of 2020, 13.5 points below the average for 2019. January's index reading was 114.6.

This month we are rolling out our new methodology for our state economic activity indexes. We have made some adjustments to the sub-components and to their weights in order to better align with state-level GDP. Also, we have rebased the sub-components of our indexes to average 100 for 2012. Our Texas Economic Activity Index declined in February as the state was caught in the grip of a once-in-a-lifetime winter freeze. The February freeze-out broke a seven-month winning streak for the Texas Index. The extreme cold combined with strain on the state's power grid and municipal water systems resulted in loss of life and damage estimates upwards of $200 billion. Fortunately, the event was relatively short lived and households and businesses in the state were well insured. There has been a quick resumption of positive momentum this spring. We expect to see strong economic growth in Texas through the remainder of this year. The six index components that were positive in February were nonfarm employment, unemployment insurance claims (inverted), house prices, drilling rig count, total state trade and hotel occupancy. The three negative components were housing starts, industrial electricity demand and sales tax revenue. The impact of the winter freeze on our Texas Index is somewhat blunted due to the smoothing process required for high frequency regional data.

The Texas Economic Activity Index consists of nine variables, as follows: nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house price index, industrial electricity sales, Texas rotary rig count, total trade, hotel occupancy and sales tax revenue. All data are seasonally adjusted. Nominal values have been converted to constant dollar values. Total index levels are expressed in terms of three-month moving averages.

Comerica Bank is a subsidiary of Comerica Incorporated (NYSE: CMA), a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Commercial Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico. Comerica reported total assets of $86.3 billion at March 31, 2021.

To subscribe to our publications or for questions, contact us at ComericaEcon@comerica.com. Archives are available at http://www.comerica.com/insights. Follow us on Twitter: @Comerica_Econ.

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SOURCE Comerica Bank

FAQ

What caused the decline in Comerica's Texas Economic Activity Index in February 2021?

The decline was primarily due to a severe winter freeze impacting the state's economy.

What was the Texas Economic Activity Index reading in February 2021?

In February 2021, the Texas Economic Activity Index was 114.1.

How did the Texas Economic Activity Index perform in January 2021?

In January 2021, the Texas Economic Activity Index was 114.6.

What are the future economic outlook predictions for Texas according to Comerica?

Comerica expects strong economic growth in Texas for the remainder of 2021.

What were the main components affecting the Texas Economic Activity Index?

Positive components included nonfarm employment and house prices; negative components included housing starts and sales tax revenue.