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Wednesday January 11th, 2006

Purchasing managers note another month of growth for Houston economy…American airlines discontinuing service to Hobby…2006 Houston International Boat, Sport & Travel Show underway at Reliant Center through Sunday… The Houston economy completed three years of continuous growth in December with a PMI of 62.5 for the month, according to the National Association of Purchasing Management. […]

Purchasing managers note another month of growth for Houston economy…American airlines discontinuing service to Hobby…2006 Houston International Boat, Sport & Travel Show underway at Reliant Center through Sunday…

The Houston economy completed three years of continuous growth in December with a PMI of 62.5 for the month, according to the National Association of Purchasing Management. The Houston PMI has been above 60 for 21 of the last 24 months–the longest period of such growth in the 11 years of this report. The Houston PMI can range from 0 to 100, and a reading below 50 indicates the economy is generally contracting. The index is based on a monthly survey of some 80 purchasing executives in oil and gas exploration and production, manufacturing, engineering and construction, chemicals, distribution, business and financial services and healthcare. Components of the PMI include sales, production, employment, purchases, prices paid and inventory levels. The index reports the lowest prices paid index number in four months, indicating that the recent price-spiking may be on the downswing.

American Airlines is discontinuing service from William P. Hobby Airport on April 3rd, although the Fort Worth-based air carrier will continue operating out of George Bush Intercontinental Airport. Regional affiliate American Eagle will continue operating nine daily trips from Hobby to Dallas/Fort Worth International Airport, and regional affiliate American Connection will continue two flights a day between Hobby and St. Louis.

OfficeMax plans to close 110 of its 950 retail stores nationwide by the end of the first quarter. There are ten Houston-area stores, but the company hasn’t said where the closings will occur or the number of jobs affected. More details are expected in the next 30 days. But OfficeMax says the actions won’t change the company’s plan to open as many as 70 stores nationwide in 2006.

2006 Houston International Boat, Sport & Travel showThe ten-day 2006 Houston International Boat, Sport & Travel Show is underway at Reliant Center through Sunday. A huge display of sailboats, luxury yachts, powerboats, jet skis, canoes and kayaks are featured, as well as camping equipment and RV’s. Kenneth Lovell is president of the annual show.

“We have all dealers within a 50-mile radius of Houston–any boat dealer that is in the show. Of course, they represent a broad spectrum of manufacturers across the U.S. You can find anything from a canoe to a yacht out here. It’s more at the dealer level than at the manfacturer level, although we have Mercury Marine–Mercury Outboard–they have a factory display here. Course we have the NASCAR Dale Earnhardt #3 car here. We have the antique boats. We have the Boy Scouts (and) Girl Scouts participating with us, along with people like the Power Squadron, U.S. Coast Guard Auxiliary.”

Over 150,000 attendees are expected at this year’s show. Lovell says the boating industry is healthy, despite increasing fuel costs.

“We slowed down a little bit when the fuel prices just started to jump, but seemingly people have become a little more accustomed to it and December’s normally a slow month for the recreational boating industry, but we had a good pick-up in December, I understand. Of course, the show’s here now, and we’ve had positive attendance for the show, and I understand there’s some positive sales going on out there.”

This is the 50th anniversary of the boat show.

“We’re blessed (that) this is the largest show in anywhere in this part of the country. The Reliant Center here is five football fields long. It’s one of the larger shows you’ll find in the U.S., really.” (Ed:“Fiftieth anniversary. How many of those have you been part of the show, yourself?”) “About 20 years, I’ve been part of it.” (Ed:“So you’ve seen some growth, I’m sure.”) “I’ve seen some great growth in this industry, yes. The new outboard engines are more fuel-efficient, smoother-riding, faster.” (Ed:“How about electronics?”) “Oh, electronics is amazing, you know, it’s things I don’t even know about. If you’re out wade-fishing, they now have a remote control for the trolling motor on your boat that the boat can come to you. Quite interesting!”

Seminars are scheduled at the boat show, covering everything from boat maintenance to the latest fishing techniques.

Student performance could soon be the main factor that decides which teachers make the most money in the Houston school district. If the school board approves the plan tomorrow–as expected–it would make Houston the largest school district in the nation to adopt a merit-pay plan for teachers. Superintendent Abe Saavedra wants to offer teachers up to $3,000 more if their students show improvement on state and national tests. The program could eventually grow to up to $10,000 in merit pay for teachers whose students do well. Other school districts around the country have implemented incentive pay programs for teachers in recent years. Denver adopted one in November, at the time becoming the largest school district to do so. Houston is the nation’s seventh-largest school district with more than 200,000 students.

U.S. Supreme Court justices are expected to rule by June on claims by service station dealers that Shell Oil and Texaco fixed prices by selling gasoline through a pair of Houston-based joint ventures. Dealers argue that the oil companies violated antitrust laws then they combined their refining and marketing businesses into joint ventures, charging the same wholesale price for Shell and Texaco-branded fuel. Shell and Texaco combined their refining and marketing assets in the western United States called Equilon Enterprises. The two oil companies, together with Saudi Arabia’s Saudi Refining, creating a second joint venture for the eastern half of the country known as Motiva Enterprises. Station dealers claim the took a $1 billion hit because of wholesale price increases set by the ventures. When Chevron purchased Texaco, the FTC ordered Texaco to first exit the Equilon and Motiva joint ventures. Shell took over Equilon, and Shell and Saudi Refining each held a 50 percent stake in Motiva.

A South Korean businessman accused of accepting millions of dollars from Iraq in the UN Oil-for-Food scandal was denied bail today. Tongsun Park had been arrested in Houston on Friday after being expelled from Mexico. He’ll be transferred to New York to face additional charges in the case. U.S. Magistrate Frances Stacy in Houston says she denied bond since she believed park was a flight risk. She cited Park’s finances, ties to South Korea and history of not dealing with legal problems in the United States. In the 1970s, Park was at the center of what became known as the Koreagate scandal, in which he was accused of trying to buy influence in Congress.

The Houston City Council has voted unanimously to outlaw the sale of cars on street curbs, right-of-way or in parking lots. The law does not apply to individual owners selling personal vehicles on their own properties. So called “curbstoners” don’t pay taxes on vehicle sales or title transfers.

BP said today its oil production for the fourth quarter of 2005 would be slightly lower than the same period last year due to hurricanes in the United States. BP–which is one of the world’s largest oil companies–also disclosed more than $1.3 billion in charges on its refining and distribution businesses. In a trading update, it estimated its output had averaged just over four million barrels of oil equivalent per day in the three months ended December 31st. That compares with just over 3.8 million barrels of oil equivalent per day in the third quarter of 2005. BP said growth in new profit centers and the completion of the planned maintenance season was partially offset by the impact of Hurricanes Katrina and Rita. The storms cost BP about 160,000 barrels per day in production. BP also said its refining output had been significantly lower in the fourth quarter due to the shutdown of its 460,000-barrel per day refinery in Texas City ahead of Hurricane Rita.

Hair care firm Alberto-Culver is getting a makeover by announcing plans to spin off its North Texas-based beauty supplies business. The suburban Chicago-based company says its Denton-based Sally Beauty Company will be spun off to its shareholders, then combined with Regis Corporation. Sally is the world’s biggest seller of professional beauty supplies. Regis is the top hair salon operator. The announcement sent shares in Minneapolis-based Regis up sharply while signaling a new focus for 50-year-old Alberto-Culver. The deal will leave it with its consumer products business, which includes hair care brands Alberto VO-5, Saint Ives, Tresemme and Nexxus. It says separating the businesses would let it better compete and operate more effectively. Regis operates nearly 11,000 salons under the names Supercuts, Jean Louis David and Vidal Sassoon.

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