Houston's economy continues to recover from pandemic, with 'improving' PMI score

The Greater Houston Partnership has announced the overall economic activity in the area grew last month as outlined in the most recent Houston Purchasing Managers Index (PMI).

The Institute for Supply Management (ISM) Houston analyzed data from Houston area supply chain executives, which showed continued improvements.

"The overall ISM-Houston PMI diffusion index rose modestly. Manufacturing activities strengthened significantly. Services activities, while continuing to point to growth, slowed minimally," Ross Harvison, chair of the ISM-Houston Business Survey Committee, wrote in the August report.

According to that report, the Houston Purchasing Managers Index rose to 57.5 in August, which was up 0.3 points from July, but improvements made in the employment index were canceled out by dips in sales/new orders and lead times which fell 4.1 points and 0.8 points. 

"These three indicators have the strongest direct correlation with the economic activity in Houston," Harrison wrote in the report.

According to the report, Houston's three-month PMI forecast continue to show positive moves when it comes to growth which a predicted 56.2 points which was up 0.8 points thanks to a high production index to make up for lower sales, new orders and prices paid.

"On an industry specific basis, oil and gas, construction, manufacturing, transportation, healthcare, new and existing home sales, professional services, and leisure and hospitality reported strong expansion," Harvison wrote in the report. "The three-month forecast continues to predict expansion, primarily due to the strength of the sales/new orders, production and prices paid indices."

According to the Greater Houston Partnership, the August PMI of 57.5 was the 13th consecutive month to be above 50.

PMI movements have been an indicator on how to track Houston's response to the global health crisis, according to the Greater Houston Partnership.

Houston's PMI saw a record low of 34.6 in April of 2020, which was right after the COVID-19 pandemic started, the Greater Houston Partnership reported. Houston's PMI started seeing much-needed improvements starting in August of 2020, although its strength hasn't been steady.