DALLAS, July 20, 2021 /PRNewswire/ -- Comerica Bank's Texas Economic Activity Index increased in May to 123.0. May's index reading was 24.0 percent above the recent low of 99.2 set in June 2020. The index averaged 112.1 points for all of 2020, 13.5 points below the average for 2019. April's index reading was revised to 118.2.
Our Texas Economic Activity Index increased by 4.1 percent in May, this is the strongest one-month gain for the index in its history since early 2008. The index has now increased for three consecutive months and is up in 10 out of the last 11 months. All nine sub-indexes were up in May, for the first time since March 2017. Improving U.S. and global conditions, rising oil prices and less restrictive COVID mitigation policies for Texas businesses have combined to bring the Texas Index for May to within 2.6 percent of its pre-pandemic level. We expect the Texas Index to exceed its pre-pandemic level by the end of summer. WTI oil prices have pulled back over the last week from $75 per barrel on July 14, to near $66 per barrel on July 19. The 13 OPEC members have reached an agreement to increase production gradually between this August and September 2022, ending their 10 million barrel per day nominal limit from Spring 2020. We expect global oil demand to continue to increase as major economies shed the weight of COVID-related restrictions. This will keep a floor under oil prices even with increased production. However, there is certainly a risk of weakening global oil demand if COVID variants require re-tightening of social mitigation policies. The Texas drilling rig count accelerated moderately from September 2020 through February 2021. Recent gains have been more gradual, leading to only modest growth in oil field employment.
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.
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SOURCE Comerica Bank