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Economic activity in the Houston area expanded for the 55th consecutive month in December, according to the most recent Houston Purchasing Managers Index (PMI) prepared by the Institute for Supply Management-Houston. The overall PMI, which measures broad economic activity according to the responses of surveyed supply chain executives, was 52.1, a modest slowdown from 53.2 in November but above the neutral point of 45 indicating growth. Manufacturing and non-manufacturing expanded in December, with PMIs of 52.2 and 52.1 respectively.

Two of the three PMI indicators that most strongly correlate with Houston’s economic growth rose while one fell:
•    Sales/new orders rose for a fifth consecutive month and at 58.2 suggests strong growth in purchasing.
•    Employment at 50.3 grew modestly.
•    Lead times at 47.0 slid, remaining below the breakeven point of 50.  
The index measuring inventories of finished goods, where values below 50 correlate with economic growth, fell to 48.7.

On an industry-specific basis:
•    Construction, retail trade, transportation and warehousing, and leisure and hospitality reported strong expansion. 
•    Nondurable goods manufacturing, professional and business services, and wholesale trade reported moderate expansion.
•    Oil and gas, and durable goods manufacturing reported moderate contraction. 
•    No sector reported strong contraction.
The PMI is published monthly by the Institute for Supply Management – Houston and is based on a survey of supply chain executives in the region. For additional information, click here.

Prepared by Greater Houston Partnership Research

Colin Baker
Manager of Economic Research
Greater Houston Partnership
bakerc@houston.org