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

IS THE ECONOMIC DROP OVER?

PMI POINTS UPWARD

..........HOUSTON February 11th, - January's PMI (Purchasing Manager's Index) seems to provide evidence that Houston's economy has reached the bottom of its current, short-lived slide into contraction. The PMI for January is 47.5, compared to December's 46.1 and marks only 4 months since the PMI fell below the break-even point of 50.

..........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.

.........."What's significant about this month's PMI is that the Sales component shows no further deterioration, but rather a lessening of its slippage by one-third," said Doug Miller, Chairman of the NAPM-Houston Business Survey Committee. "And even though the Employment index still reflects job loss, the jobs number saw no further erosion in the past month. The Production loss rate also appears to be stabilizing. Those are definitely good signs."

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

.........."The Prices Paid numbers reflected substantial increases in January. It's questionable however, that all reported increases will survive the apparent softness in several areas of the economy," said Miller.

.........."Several components of the PMI have now been relatively flat for a third month, clearly raising the possibility that Houston's economy may be near the point of climbing back out of the hole it has been toying with for the past six months," added Miller

The NAPM-Houston Business Report began production 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