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Houston’s economic expansion strengthened in June, according to the most recent Houston Purchasing Managers Index (PMI). The June ’21 PMI of 56.7, up from 54.2 in May, marks the 11th consecutive month above 50.  Readings above 45 correlate with expansion of the service side of Houston’s economy, below 45 a contraction, while readings above 50 signal expansion in Houston’s goods producing sectors, below 50 a contraction. 

Movements in the PMI over the last 15 months have tracked Houston’s response to the pandemic. In April ’20, the PMI fell to 34.6, the lowest reading on record. While the index has pointed toward expansion since August ’20, the strength of the recovery decreased as the virus surged in late fall and winter. Vaccine rollouts have improved the near-term outlook since January. The June ’21 reading is the highest since March ’21 

The index is composed of eight underlying indicators: sales or new orders, production, employment, purchases, prices paid for major purchases, lead times from sellers, purchased materials inventory (raw materials and supplies), and finished goods inventories. In June, the three sub-indexes that strongly cor-relate with growth—sales/new orders, employment, and lead times—all pointed to expansion. 
 

On an industry specific basis, durable and non-durable goods manufacturing, leisure & hospitality, oil and gas, transportation, construction and health care showed strong expansion in June. Professional services and real estate were near neutral. 

The PMI is published monthly by the Institute for Supply Management – Houston and is based on a survey of supply chain executive in the region.  For additional information on the index, click here.

Patrick Jankowski, CERP
Senior Vice President, Research
713-844-3616
pjankowski@houston.org

Josh Pherigo
Director, Data Analytics
713-844-3617
jpherigo@houston.org