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

ECONOMIC GROWTH CRAWLING

EMPLOYMENT SLOWING

HOUSTON, October 10, 2001 ----- Houston’s economic growth rate continued to decelerate in September as the PMI was 51.9 for the month. This compares with August’s 54.6 and 58.5 in July. A PMI of 50 (no growth) is within sight and could result in October. September’s PMI (Purchasing Managers Index) reflects the lowest growth rate reported since May, 1999.

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.

"The Sales component of the PMI recorded its lowest index since December of 1999 and has been slowing for five consecutive months," said Doug Miller, Chairman of the NAPM-Houston Business Survey Committee. "As a result the Production index was flat for the month and could slip into contraction next month."

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

"Employment continued to grow, as it has in eleven of the past twelve months, however, its growth rate slowed significantly and will likely flatten further as Sales and Production continue to soften," said Miller. "Another result of decreasing Sales growth was that Finished Goods Inventories rose, albeit only slightly, for the first time in thirty-eight months. Houston’s economy seems to see very little reason to continue growing at the present time."

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 2001 by NAPM-Houston, Inc. All Rights Reserved