The National Association of Purchasing Management Houston Inc.,

..........HOUSTON, May 10th - The Houston PMI (Purchasing Manager's Index) fell in April at the worst month-to-month rate since last October, the month following the September 11th tragedy. April's PMI was 46.3, nearly a 5% drop from the 48.6 reported in March. Although there is concern about the magnitude of the April decline, the drop does not give evidence of a general reversal of the improvement seen in the PMI for the past three months; a chuckhole to be sure, but not necessarily indicative of a general washout of the roadbed.

..........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.

.........."Sales and Production both lost considerable ground in April after appearing to level in the previous two months," said Doug Miller, Chairman of the NAPM-Houston Business Survey Committee. "There is obviously a good deal of softness in the city's effort to recover and move into growth territory. The national economy still shows areas of weakness and international events are promoting wariness regarding full economic expansion."

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

.........."Purchases of goods and services accelerated in their decline over the past month, while Employment, although still in contraction, seems to be attempting to get back to positive ground," said Miller. "Hiring will likely remain slow for the next several months until Sales and Production figures show consistency in an upward trend."

NAPM - HOUSTON BUSINESS REPORT
For further information, contact Douglas R. Miller, C.P.M. - 713-988-7306