Business

Houston Economy Continues On Road To Expansion

The Purchasing Managers Index is indicating incoming expansion for the second straight month.

Photo of downtown construction
The monthly survey of supply chain managers indicates Houston’s economy is on track to expand.

November marked the second month in a row the Houston Purchasing Managers Index is above the neutral reading of 50 – after 21 months of contraction.

The PMI measures economic activity in the city's major industries based on eight indicators, including employment, sales and production.

"I believe a lot of the underlying indicators are saying things are improving, even though they have not yet moved into an expansion range," said Ross Harvison, who created the index for the Institute for Supply Management. "They're contracting but at a very, very low rate at this point."

The index is close to the neutral level for employment, lead times and purchased inventory.

As for the road ahead, Harvison said the fact that the price of oil has risen to more than $50 a barrel is a good sign.

"Certainly if it moved to $60, it would be considerably stronger," he said. "But most of the economists that we work with are indicating we should be in fairly good shape for growth at the $50 level."

There's a good chance oil prices will stay above $50 per barrel after OPEC recently agreed to cut production next year.

 

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Florian Martin

Florian Martin

Business Reporter

Florian Martin is currently the News 88.7 business reporter. Florian’s stories can frequently be heard on other public radio stations throughout Texas and on NPR nationwide. Some of them have earned him awards from Texas AP Broadcasters, the Houston Press Club, National Association of Real Estate Editors, and Public Radio...

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