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

HOUSTON ECONOMY DECLINING

SALES FALL SHARPLY

JOBS IN CONTRACTION

..........HOUSTON November 13th, ----- Houston’s economy began contracting in October for the first time in 32 months as the PMI fell to 48.6 from September’s 51.9. The PMI has lost ten points in the past 3 months and will likely drop further over the next several months.

..........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 took a very significant hit in October with 41% of survey contributors reporting Sales drops for the month," said Doug Miller, Chairman of the NAPM-Houston Business Survey Committee. "The Production index also recorded negative growth for the month and Employment showed sharp contraction after reflecting job growth in twenty of the last 22 months."

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

.........."Prices were generally flat for the month with the slowdown defusing any tendency for inflation," said Miller. "But, the concern now is ‘how far is down’. The only economic drivers in sight right now are predominately negative. It will take increased energy prices and/or a reversal in the national economy to move the Houston PMI back into growth territory. Lacking either of those factors, Houston’s economy will likely soften much further and that will continue well into the first half of 2002."

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