(Houston, Texas) – Area Supply Chain leaders indicate that economic activity in Houston contracted in February for the Fourteenth consecutive month. Health Care and Financial Services continue to buoy the Houston economy and Durable Goods Manufacturing sees improvement.
The Houston Purchasing Managers Index (H-PMI) fell from its January level of 45.6 to 44.5 in February. The seasonally adjusted Finished Goods Inventory and Prices Paid Indices, the only two indicators that are inversely correlated with economic activity, continue to predict economic expansion near term. All other indicators (Sales/New Orders, Production, Employment, Lead Times, Purchases, and Purchased Inventory) are showing continued contraction.
The Sales/New Orders Index registered 41.3 in February, down 5.4 points from its January reading. The Production Index registered 38.6, down 0.5 points. The Employment Index registered 28.2, down 5.2 points. The Purchases Index registered 38.3, a decrease of 0.4 points. The Prices Paid Index registered 38.2, a decrease of 2.0 points. The Lead Times Index registered 35.5, falling 1.2 points. The Purchased Inventory Index registered 36.8, an increase of 1.6 points. The Finished Goods Inventory Index registered 29.9, a decrease of 0.6 points.
The Health Care sector continues to show significant strength and Financial Services remained strong. Durable Goods Manufacturing improved overall performance to above neutral for the first time since the middle of last year. Construction and Non-Durable Goods Manufacturing have moved to just below neutral overall, joining Wholesale Trade at this level. Oil and Gas exploration and related industries continue to cause the greatest concern for the near term growth of the Houston economy.