National Association of
Purchasing Management - Houston, Inc.
PO Box 771203 - Houston, Texas 77215-1203
NAPM - HOUSTON BUSINESS REPORT

For further information, contact:
Douglas R. Miller, C.P.M. - 713-988-7306

Press Release

ECONOMY BOTTOMING?

PRODUCTION DOWN SHARPLY

..........HOUSTON January 10th, ----- The Houston PMI (Purchasing Managers Index) dropped in December from 48.1 to 46.1, marking the third consecutive month of economic contraction and the sixth month of a weakening PMI picture.

..........The Houston PMI, which can range from 0 to 100, is a leading indicator for industrial production, typically forecasting change by three to four months. A reading above 50 indicates that the Houston economy is generally expanding. A reading below 50 indicates the economy is generally contracting. The PMI is based on a monthly survey of some 80 purchasing executives in leading Houston industries, including oil and gas exploration and production, manufacturing, engineering and construction, chemicals, distribution, business and financial services and healthcare, among others.

.........."Although the two point drop in the PMI is significant, six of the eight components of the PMI, in fact, leveled in December. We might be seeing a bottoming of the current slide," said Doug Miller, Chairman of the NAPM-Houston Business Survey Committee. "We need another month to gain clarity but December did not produce a devastating picture at all, even with the continued slippage."

..........There are eight components of the PMI, including Sales, Production, Employment, Purchases, Prices Paid, and Inventory levels.

.........."Production was the area that most affected the PMI drop in December," said Miller. "The Production index fell from +4 in November to –14 in December. On the positive side, there is virtually no evidence of price inflation at the present time and employment losses appear to be stabilizing, with 70% of respondents reporting no change in manpower levels in the past month."

.........."With the national economy teetering on the edge of improvement, Houston could make a recovery move sooner than earlier expected," Miller added.

The NAPM-Houston Business Report began publication in January 1995.
Subscriptions to the report are available through NAPM-Houston.
National Association of Purchasing Management - Houston, Inc. is an affiliate
Of the National Association of Purchasing Management.
Copyright 2002 by NAPM-Houston, Inc. All Rights Reserved