The National Association of Purchasing Management Houston Inc.,

........            HOUSTON, November 12th - The Houston economy was just under the break-even point in October for the second consecutive month after four months of moderate growth. The Houston PMI (Purchasing Managers Index) was 49.0 in October, just two-tenths of a point ahead of September's 48.8 and four points, or 7-1/2 per cent, below the August PMI of 53.0.

            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 rates both weakened in October after appearing to be strengthening from May through August," said Doug Miller, Chairman of the Business Survey Committee for NAPM-Houston. "Purchases dropped at the fastest rate since April and job losses accelerated noticeably. "

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

            “With inventories dropping sharply, job cuts increasing and production rates coming down, the picture we see is one of very little to no confidence in the Houston economy by a majority of firms. This, of course is fed significantly by a lackluster, slightly negative U.S. economic picture, and great uneasiness about both national and international events and possible events-to-be. Further, while the stock market may not be an indicator of a weak economy or of a possible pending depression (and we believe it is not) it certainly is not presently an economic motivator either," said Miller. "2003 will probably begin with a quiet meow rather than the roar we had hoped for."

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