Business

Houston Economic Activity Dives To Six-Month Low In November

Low oil prices hurt the manufacturing, transportation, and wholesale trade sectors, along with oil exploration itself.

The Houston Purchasing Managers Index (PMI) has fallen to its lowest level since April. The November survey of local supply chain managers marks the latest sign the region’s economy is slowing, in the wake of low oil prices.

The PMI plunged to 44.9 percent last month, a drop of more than three percentage points from October. The index has a range of 0 to 100. Readings below 50 generally indicate production will contract in the near future. November marks the eleventh month in a row of contraction for Greater Houston, as measured by the index.

“The concern that I see in these numbers is that the improvements that we were seeing in the durable goods manufacturing area and in wholesale trade were reversed this month, and that was the biggest portion, or a very large portion of the reduction that we saw here,” says Ross Harvison, president of ISM-Houston.

Oil and gas exploration remains very weak, and declining pipeline activity is hurting transportation.

“We are seeing softness within the non-durable goods manufacturing area as well,” Harvison says. “Typically during this timeframe, we do see production at a lower rate within those industries. However, this month we took a larger drop than would be expected.”

Construction is getting a slight lift from ongoing petrochemical projects. But Harvison says health care is the only sector of the region’s economy showing any real strength.

 

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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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