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Houston Sales, Production Down In September

The September survey of Houston purchasing managers showed a sharp reversal, erasing most of the gains of the previous two months.


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The Houston Purchasing Managers Index dropped nearly a full point in September to 59.4.

Mike Valant is business survey chair with the Institute of Supply Management — Houston.

“Production has pulled back, and sales pulled very, very strongly. At the same time, all the finished goods inventories had a decline in that, which means they’re selling what they’ve got, but they’re not restocking it.”

Valant says manufacturers are reluctant to ramp up production or make major purchases because of uncertainty over next month’s presidential elections. He says end-of-year inventory costs may also have played a role in the declines.

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.

PMI graph
Graph is from ISM-Houston Business Report.