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Texas  + State of Texas  + Industrial  | 
Economy

Texas Economic Activity Index Increases for Three Months Running

Comerica Bank’s Texas Economic Activity Index increased in May to 123. May’s index reading was 24 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.

The Texas Economic Activity Index increased by 4.1 percent in May, 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.

The Texas Index should exceed its pre-pandemic level by the end of summer. WTI oil prices have pulled back in the last week from $75 per barrel on July 14 to nearly $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 the 10 million barrel per day nominal limit from spring 2020.

Comerica Bank expects 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.

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About Lisa Brown

Lisa Brown has decades of experience in corporate communications and marketing management with organizations including Coldwell Banker Residential, Grubb & Ellis, Marcus & Millichap, NAIOP, SIOR and ALM. In those positions, she worked in conjunction with chief executive officers and chief marketing officers to create corporate messaging, cohesive branding standards, strategic marketing plans and thought pieces. Brown is a frequent speaker at industry events and an editing adjunct professor for an online course. She has a master’s degree in mass communications from San Jose State University.

  • ◦Economy
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