Report: Greater Houston Economy Has Contracted During The Past 12 Months

Supply chain managers report falling orders, production, and employment, as slower global growth compounds the damage from low oil prices.

December marked a grim milestone for Houston . According to the latest survey of supply chain managers, the region’s economy has now contracted for 12 months in a row.

The Houston Purchasing Managers Index fell to 43.3 percent in December, down 1.6 percentage points from November. The index has a range of 0 to 100. Readings below 50 generally indicate production will contract in the near future.

Low oil prices have mauled oil exploration, oilfield services and durable goods manufacturing over the past year. But Ross Harvison, president of the Institute for Supply Management – Houston, says the pain is spreading.

“We’re starting to see downward pressure on a lot of the other industries within the Houston area, both because of the oil and gas picture, but also because the overall economic situation on a global basis appears to be softening,” Harvison says. “The Chinese numbers are significantly lower than they were. We continue to see indications within Europe that they may be moving back into recession.”

Weaker global demand is already taking a toll on Houston’s wholesale trade sector. Construction and non-durable goods manufacturing are limping along in neutral. Health care remains strong.


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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