March was the sixth month in a row that the Houston PMI was above the neutral level of 50 – which indicates economic expansion.
The index measures economic activity based on eight indicators, such as employment, sales and production across major industries.
Ross Harvison with the Institute for Supply Management compiles the data as reported by area supply chain leaders.
He attributes the three-point drop from February to a softening of the price of oil, “which, I think is causing the oil and gas folks to think a little bit more about how much expansion they’re going to see,” he said. “But certainly they did report growth month over month, just not as strong as it had been for the last two months.”
Harvison is not concerned about the economy slipping back into contraction.
“Going forward, I think if we stay at about $50 a barrel, I think oil and gas and durable goods will stay just above neutral,” he said. “And we’ll have to see where the other industries fall.”
He said the only sector that continues to be a concern is engineering and construction, which is recording negative numbers in new orders, employment and lead times.