Houston’s economy has been growing steadily for the past three and a half years, according to a leading economic barometer, and those who know say it’s because the oil and gas industry is so strong and gettting stronger. Houston Public Radio’s Jim Bell reports.
On a scale ranging from zero to 100, a Purchasing Manager’s index over 50 means more than half the companies in Houston are strong and the economy is expanding. June was the 42nd straight month that Houston’s PMI has been over 50 — 61.1 in fact — which means about sixty percent of Houston companies are strong and hiring. PMI publisher Bette Bryan she says as it has always done, petroleum is holding up the overall economy.
“Oil and gas is the catalyst, but it filters down to all other aspects of the economy within Houston. As my suppliers are busier, then the suppliers of those suppliers, etcetera etcetera etcetera, it is filtered down to all areas of the economy at this point. ”
With oil prices and retail gasoline prices higher than ever it’s not hard to understand why this is happening, but why is it happening in Houston?
“Houston’s economy hasn’t diversified as much as the Greater Houston Partnership would want you to think.”
Barbara Shook writes about oil and gas for the Energy Intelligence Group.
“Whatever the key industry is will determine how well a given economic, or geographical region does no matter what the broader economic environment might be. ”
Shook says that’s why, even though Houston has diversified its economic base considerably since the oil bust of the 1980s, Houston’s economic fortunes are tied to oil and gas profits and losses.
“Even with oil and gas and related activities making up only 60 percent of the local economy, compared to 80 percent in the 1970s and 80s, Houston is still the energy capital of the western hemisphere, if not the entire world.”
Houston’s economy is also a reflection of the strong national economy. The Purchasing Managers Index shows the overall economy grew for the 56th consecutive month in June, and of the 14 industries reporting growth in June, petroleum is number one. Jim Bell, Houston Public Radio News.