Falling Oil Prices Act As Drag On Houston Economy In December

Sales, production, purchases, and prices all went negative at year end.


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The Houston Purchasing Managers Index fell to 51.5 percent in December, down from 54.3 percent in November. That marked the second monthly decline in a row for the index. The index has a range of zero to 100. Readings over 50 generally indicate production will expand over the coming months.

“We saw sales go below, the index go below zero,” says Ross Harvison, vice president of the Institute for Supply Management – Houston. “We also saw production go below zero and purchases go below zero, as well as prices. They’re only marginally below zero, but those tend to move in the same direction, either up as the economy expands or down as the economy contracts.” On the plus side, Houston-area employment continued to grow.

While weaker oil prices are taking a toll on local businesses, Harvison says they are giving a lift to the broader U.S. economy, from which Houston should benefit. He says that last month’s slowdown was at least partly due to seasonal factors.


Institute for Supply Management – Houston, December Report


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Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media’s coverage of national, state, and local elections. He also reports on major policy issues before the Texas Legislature and county and city governments across Greater Houston. Before taking up his current post, Andrew spent five years as Houston Public Media’s business reporter, covering the oil...

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