Friday, 14 April 2017
By Boyd Nash-Stacey
While the likelihood of a U.S. recession is the highest it’s been since the 2009 downturn, based on a state-by-state assessment, the overall probability remains low.
However, the outlook for several states appears disproportionately negative due to declining sectors. The current situation more accurately mirrors the 1986 commodity cycles that led to recession in commodity producing states and solid growth elsewhere—as the risk in 2016 is 12.3% for the U.S. excluding oil producing areas and 86.4% for oil producing areas.
In December, activity increased in 44 states, with the strongest gains in the West. Across the Sunbelt region, activity decelerated despite pickups in the manufacturing, mining, and retail trade sectors.
The drop in oil prices and a weakened manufacturing sector suggest a high probability (90%) for Texas recession.