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Houston’s economy expanded at a slower pace 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 a survey of supply chain executives, eased to 50.2 in December from 50.9 in November. Even so, the index remained above the 45-point break-even threshold that signals overall economic expansion. Manufacturing contracted for a fifth consecutive month, while non-manufacturing extended its expansion streak to seven months, though its growth in December was marginal.

The three PMI components most closely tied to Houston’s overall growth presented a mixed picture:
• Employment fell to 49.3 in December from 51.2 in November, signaling a flip from expansion to modest contraction.
• Sales/New Orders held at 49.9, pointing to essentially flat activity and little change from November.
• Lead Times rose to 53.2 in December from 47.8 in November, moving back into expansion territory after contracting in the prior month.

On an industry-specific basis:
• Health care, construction, and professional services reported strong expansion.
• Oil and gas exploration, reported moderate expansion.
• Durable goods manufacturing was flat.
• Retail, wholesale, and non-durable goods manufacturing reported 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
[email protected]

Clara Richardson
Analyst, Research
Greater Houston Partnership
[email protected]