Comerica Bank’s California Economic Activity Index increased by 0.8 of a percentage point in March to reach 128.7. February’s index reading was 127.9.
The index averaged 122.4 points in 2016, two and three-fifths points above the average for all of 2015. March’s reading is 45 points, or 53 percent, above the index cyclical low of 84.1.
“Our California Economic Activity Index increased again in March, for the 12th consecutive month,” said Robert Dye, chief economist at Comerica Bank. “Results were mixed in March, with four out of eight index components positive and the other four negative. Positives for March were payroll jobs, federal defense spending, house prices and the NASDAQ 100 Technology Stock Index. Negatives were state exports, unemployment insurance claims, housing starts and hotel occupancy.
“We expect the California economy to make moderate gains through the remainder of this year, Dye said. “The state is exposed to key elements of the Trump administration agenda, including export policy and defense spending. Also, federal personal income tax reform may have some negative implications for California if the deduction for state and local taxes is eliminated or reduced. House prices are generally improving statewide...”
The California Economic Activity Index consists of eight variables, as follows: nonfarm payrolls, exports, hotel occupancy rates, continuing claims for unemployment insurance, housing starts, national defense spending, house prices, and the NASDAQ-100-Technology Sector Index (NDXT). All data are seasonally adjusted, as necessary, and indexed to a base year of 2008. Nominal values have been converted to constant dollar values. Index levels are expressed in terms of three-month moving averages.
Comerica Bank, with key California locations including San Diego, San Francisco and the East Bay, San Jose, Los Angeles, Orange County, and the Inland Empire, is a subsidiary of Comerica Inc. based in Dallas.