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Economic activity in Houston continued to expand in January. The region’s nonmanufacturing sectors expanded at a faster pace than in December while manufacturing expanded for the first time in three quarters, according to the most recent Hou¬ston Purchasing Managers Index (PMI) prepared by the Institute for Supply Management-Houston.
The overall January PMI rose 1.2 points to 52.6, up from 51.4 the month before. Readings above 50 indicate overall expansion in the economy, below 50, contraction.
Regarding the two major subcomponents:
Two of the three underlying indicators that have the strongest positive correlation with economic growth—sales/new orders and employment—are pointing to expansion. The third indicator with a strong positive correlation (lead times) continues to give a modest signal for contraction.
The finished goods inventory index, the underlying indicator with the strongest inverse correlation with growth, rose 2.1 points to 49.8. Being so close to the neutral point of 50.0 suggests neither contraction nor expansion.
The PMI is published monthly by the Institute for Supply Management – Houston and is based on a survey of supply chain executives in the region. For additional information, click here.
Prepared by Greater Houston Partnership Research
Patrick Jankowski, CERP
Senior Vice President, Research
Greater Houston Partnership
Houston's PMI registered 52.6 in January '24