Expect oil prices to plunge lower
The index rose 0.7 percentage points to 106, the bank reported today. August’s reading was 33 points, or 46 percent, higher than the low of 72.6. The index averaged 100.3 points for all of 2013 and 98.2 in 2012.
“The Texas economy continued to advance strongly in August,” said Robert Dye, chief economist for Dallas-based Comerica. “Seven out of eight components of the index improved or held steadyl. Only housing starts eased. The drilling rig count remained strong through August, even as oil prices began to fall.”
Current crude oil prices near $81 a barrel can sustain a “healthy Texas energy sector, Dye said. He does not expect oil prices to plunge lower, however, “that is a downside risk to the Texas economy” that he’s monitoring carefully, he added.
The seven seasonally adjusted index components are: employment, exports, sales tax revenue, hotel occupancy rates, continuing claims for unemployment insurance, building permits and the Baker Hughes rotary rig count.
Comerica rolled out new methodology for the August index, so historical index values may be different than earlier editions.