Comerica Bank’s California Economic Activity Index declined in February, dropping 1.1 percent to 109.
The index averaged 106 points for all of 2013, five points above the average for all of 2012. January’s index reading was unchanged at 110.1, according to the report.
Comerica’s chief economist, Robert Dye, expects the state’s economy to improve through 2014.
“Most components of the index were positive for February, indicating that the overall series will turn north again soon,” Dye said. “Drought conditions are hurting the agricultural sector, and the state’s important defense industry is feeling the drag from federal spending cuts. However, most other sectors of the California economy are on a moderate improvement track supported by a strong high-tech sector and climbing house prices.”
The California Economic Activity Index consists of eight variables: nonfarm payrolls, exports, sales tax revenues, hotel occupancy rates, continuing claims for unemployment insurance, building permits, Baker Hughes rotary rig count and the Silicon Valley 150 Index.
February’s reading is 36 points, or 50 percent, above the index cyclical low of 72.7, according to the report.