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Economic growth in the Houston area slowed in March, 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, was 49.7 in January, a slight decrease from 50.0 in February, and above the neutral point of 45 indicating expansion in the overall Houston economy. Manufacturing contracted with a PMI of 47.2, while non-manufacturing grew moderately with a PMI of 50.2.

Two of the three PMI indicators most strongly correlated with Houston’s economic growth contracted while one expanded:
•    Sales/new orders slid into contraction territory at 49.4 after seven months of expansion.
•    Lead times remained slightly negative at 49.6 for the second consecutive month.
•    Employment improved to 50.4, indicating moderate expansion. 
The index measuring inventories of finished goods, where values above 50 correlate with economic contraction, rose to 52.5.

On an industry-specific basis:
•    Professional and business services reported strong growth.
•    Construction, wholesale and retail trade, nondurable goods manufacturing, and transportation and warehousing were neutral.
•    Oil and gas and durable goods manufacturing 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

Clara Richardson
Analyst, Research
Greater Houston Partnership
crichardson@houston.org