The Houston Purchasing Managers Index dropped to 57.1 in May, down a point from April.
Mike Valant is business survey chair with the Institute of Supply Management -- Houston. Valant says the index points to a stabilizing of the region’s economy rather than an outright decline. He says employment, which took the steepest drop among the survey’s indicators, provides a prime example.
“Sixty percent remain the same, while only 14% reduced staff, and 26% are still increasing. So it’s not a negative, it’s just kind of stabilized at a plateau.”
The survey indicated a similar leveling off of sales, with orders dropping off for oil and gas as well as for manufactured goods.
“But the household comment is the last three years is a dramatic increase, so everybody seems to be saying we kind of plateaued here at a higher level than what we’ve have been in the past.”
The PMI indicates likely shifts in production three or four months in advance. It has a range of 0 to 100, with readings over 50 pointing to near-term production gains.