Manufacturing Activities Return to Expansion

ISM-Houston announced today that according to Houston area supply chain executives, overall economic activity in Houston expanded in December for the seventh month. Manufacturing activities expanded for the first time since January. Services activities have now expanded for the last five months.

Click here to see the full report on the ISM-Houston website.

Manufacturing Activities Return to Expansion

ISM-Houston announced today that according to Houston area supply chain executives, overall economic activity in Houston expanded in December for the seventh month. Manufacturing activities expanded for the first time since January. Services activities have now expanded for the last five months.

Click here to see the report on the ISM-Houston website.

New Orders and Production for Houston Manufacturing Improve

(Houston, Texas) – According to Houston area supply chain executives, overall economic activity in Houston expanded in November for the sixth month. Non-durable goods manufacturing joined services in pointing to expansion. Durable goods manufacturing, while improving, continued to report contraction.

The Houston Purchasing Managers Index fell 0.8 points to 52.4 during the month. Sales/new orders and lead times, two of the three underlying indicators that have a strong direct correlation with the economy, moderated somewhat but continue to point to strong expansion. Employment, the third indicator with a strong positive correlation, continues to show economic weakness. The sales/new orders index fell 1.5 points in November to 59.4. The lead times index fell 1.6 points to 52.6. The employment index rose 0.4 points to 47.6. Finished goods inventory, the underlying indicator that has the strongest inverse correlation with economic activity, rose 2.2 points to 50.3, showing a very modest contraction signal.

The three-month forecast for the Houston PMI rose 2.5 points to 55.5. This was driven by strengthening production and prices paid indices offset modestly by weakening in the sales/new orders index. These indices have a strong direct correlation with economic activity at the three-month forecast horizon.

On an industry specific basis transportation, wholesale trade, accommodations and foods services, and health care reported expansion. Durable goods manufacturing reported contraction at a slower pace. All other sectors reported near neutral. The three-month forecast predicts strong improvement for all sectors primarily due to the current strength of the production and sales/new orders indices. As noted previously, this is dependent on the severity of the current pandemic.

Click here to see the online version and here to see the PDF version of the full report.

ISM-Houston Notes that Economic Growth Continued in October

(Houston, Texas) – According to Houston area supply chain executives, overall economic activity in Houston expanded in October for the fifth month led by improving expansion in non-manufacturing activities. Manufacturing activities contracted at a very slow pace again this month.

The Houston Purchasing Managers Index fell a modest 0.2 points to 53.2 during the month. Two of the three underlying indicators that have a strong direct correlation with the economy, sales/new orders and lead times, continue to point to strong expansion. The third, employment, is still giving a weak signal for contraction. The sales/new orders index rose 1.7 points in October to 60.9. The lead times index fell 1.3 points to 54.2. The employment index fell an additional 1.5 points to 47.2. The underlying indicator that has the strongest inverse correlation with economic activity, finished goods inventory, fell 1.5 points this month to 48.1, maintaining a modest expansion signal.

The three-month forecast for the Houston PMI fell 1.1 points to 53.0. This was driven by weakening production, prices paid, and lead times indices offset modestly by strengthening in the sales/new orders index. These indices have a strong direct correlation with economic activity at the three-month forecast horizon.

On an industry specific basis, construction joined wholesale trade, accommodations and foods services, and health care reporting expansion. Durable goods manufacturing reported contraction. All other sectors reported near neutral. The three-month forecast predicts modest improvement for all sectors depending on the severity of the COVID-19 pandemic.

Click here to see the online version and here to see the PDF version of the full report.

Capability Assessments

We have proven process maturity model based methods and benchmarking techniques to help you understand where you are compared to your peers and the performance leaders. We’ll work with you to create a transformation plan based on this assessment with a target to implement known, highly effective, procurement practices while meeting your total cost of ownership targets. We’ll also help you execute this plan, ensuring that you deliver both near term quick hits and longer term differential improvement.

READ MORE ABOUT PROCUREMENT CAPABILITY ASSESSMENTS

READ MORE ABOUT OPERATIONS CAPABILITY ASSESSMENTS

Houston Economic Growth Continues

(Houston, Texas) – According to Houston area supply chain executives, overall economic activity in Houston expanded in September for the fourth month led by improving expansion in non-manufacturing activities. Manufacturing activities contracted at a very slow pace again this month.

The Houston Purchasing Managers Index rose a modest 0.8 points to 53.4 during the month. Two of the three underlying indicators that have a strong direct correlation with the economy, sales/new orders and lead times, pointed to stronger expansion this month. The third, employment, is still giving a weak signal for contraction. The sales/new orders index rose 2.7 points in September to 59.2. The lead times index also rose 1.0 points to 55.5. The employment index fell 1.0 points to 48.7. The underlying indicator that has the strongest inverse correlation with economic activity, finished goods inventory, fell 1.8 points this month to 49.6, giving a modest expansion signal.

The three-month forecast for the Houston PMI rose 0.6 points to 54.1. This was driven by strengthening in the sales/new orders, production, prices paid indices, and lead times indices. These indices have a strong direct correlation with economic activity at the three-month forecast horizon.

On an industry specific basis, wholesale trade joined real estate, accommodations and foods services, transportation, and health care reporting expansion. Durable goods manufacturing and professional services reported contraction. All other sectors reported near neutral. The three-month forecast predicts modest improvement for all sectors assuming the severity of the COVID-19 pandemic will not worsen during this time frame.

Ross Harvison, CPSM
ISM-Houston, Inc.
Business Survey Committee Chair

Click here to see the full online report.

Procurement Benchmarking

Significant procurement transformation is hard. If you are like most procurement leaders, you’ve already started a strategic sourcing effort to get quick savings, but you’re finding it hard to figure out what to do next. Do I improve my IT systems to gain efficiency and reduce errors? What if I focus on cleaning up my master data to better understand and control my spend? Should I modify my processes to align them with those I know to be highly effective? Do I focus on changing my organization and improving my staff capability? By now, you’ve probably concluded that you will need to do all of this and more, but you’re struggling to prioritize your efforts.

READ MORE

Houston Economy Strengthens – Corona Virus Concerns Moderate

(Houston, Texas) – According to Houston area supply chain executives, overall economic activity in Houston expanded in August for the third month in a row led by modest expansion in non-manufacturing activities. Manufacturing activities contracted at a very slow pace during the month.

The Houston Purchasing Managers Index rose 4.7 points to 52.6 during the month. Two of the three underlying indicators that have a strong direct correlation with the economy, sales/new orders and lead times, pointed to stronger expansion this month. The third, employment, is now giving a very weak signal for contraction. The sales/new orders index rose 2.8 points in August to 56.5. The lead times index also rose 2.8 points to 54.5. The employment index rose 8.4 points to 49.7. The underlying indicator that has the strongest inverse correlation with economic activity, finished goods inventory, rose 1.6 points this month to 51.4, giving a modest contraction signal.

The three-month forecast for the Houston PMI rose 2.3 points to 53.5. This was driven by strengthening in the sales/new orders, production, prices paid indices, and lead times indices. These indices have a strong direct correlation with economic activity at the three-month forecast horizon.

On an industry specific basis, real estate joined accommodations and foods services, transportation, utilities, and health care reporting expansion. Oil and Gas joined construction, durable goods manufacturing, and professional services reporting contraction. All other sectors reported near neutral. The three-month forecast for all sectors indicates a belief that the severity of the COVID-19 pandemic will moderate during this time frame.

Ross Harvison, CPSM
ISM-Houston, Inc.
Business Survey Committee Chair

Click here to see the full online report.

Houston Economy Expanded at a Slower Pace in July

(Houston, Texas) – According to Houston area supply chain executives, overall economic activity in Houston expanded in July for the second month in a row. Manufacturing activity contracted at a modestly faster pace.

The Houston Purchasing Managers Index fell 1.6 points to 47.9 during the month. Two of the three underlying indicators that have a strong direct correlation with the economy, sales/new orders and lead times, pointed to expansion again this month. The third, employment, continues to give a strong signal for contraction. The sales/new orders index fell 3.1 points in July to 53.7. The lead times index was unchanged at 51.7. The employment index fell 3.5 points to 41.3. The underlying indicator that has the strongest inverse correlation with economic activity, finished goods inventory, fell 8.5 points this month to 49.8. This is a positive signal as it indicates that companies are getting inventories under control after the rapid fall in demand in the second quarter caused significant inventory increases.

The three-month forecast for the Houston PMI fell 2.7 points to 51.2. This was primarily driven by weakening in the sales/new orders, production, and prices paid indices. These indices, along with the lead times index, have a strong direct correlation with economic activity at the three-month forecast horizon.

On an industry specific basis, accommodations and foods services, transportation, utilities, and health care reported expansion again this month. Real estate, oil and gas, and nondurable goods manufacturing reported near neutral. Construction, durable goods manufacturing, and professional services continued to report contraction. The three-month forecast continues to be highly uncertain as further economic improvement is dependent on the severity of the COVID-19 pandemic.

Ross Harvison, CPSM
ISM-Houston, Inc.
Business Survey Committee Chair

Click here to see the full online report.