It’s no surprise that wavering fuel prices have dealt a heavy blow to Texas’ economy in recent months. Comerica Bank’s Texas Economic Activity Index confirms the economic damages caused by low oil and gas prices, indicating a 3.4 percent index drop in March, knocking the reading down to 101.1.
According to the San Antonio Business Journal, the state’s reading in March sat 29 points— or 39 percent—above the cyclical low of 72.6. The criteria Comerica evaluates for its index includes nonfarm payrolls, hotel occupancy and sales tax revenues based off of its baseline data from 2008.
“The Texas economy has lost momentum due to the reset in oil prices. Our Texas Economic Activity Index has declined for five consecutive months, beginning in November of last year,” Comerica Bank Chief Economist Robert Dye said in a press release. “We expect to see more declines over the coming months as consolidation in the state’s energy sector continues.”
Despite the index’s data pointing to a currently troubled economic scenario, oil prices and rig counts offer some optimism. Oil prices may stabilize around $60 per barrel and rig counts will likely recover significantly by mid-summer.