April 12, 2010
PURCHASING MANAGERS INDEX

The Houston Purchasing Managers Index, a short-term leading indicator of regional production, rose in March to 55.3—the highest reading since August ’08. This reading is the 12th consecutive monthly gain from 39.0 in March ’09—the record low in a series that dates to January ’95. And it’s the sixth straight reading above the neutral point of 50. Because readings greater than 50 indicate likely increases in production over the coming three or four months, Houston almost certainly saw rising production in Q1/10. This latest reading foreshadows continued gains at least through midyear.

The Houston PMI is based on eight components, seven of which improved from February to March. Sales slipped slightly over the month, Production was unchanged, and Employment—which remained negative by a very narrow margin—improved to its best reading since October ’08.

The Houston PMI survey is conducted and published each month by the National Association of Purchasing Management-Houston.

NEW CAR, TRUCK AND SUV SALES

Unit sales of new cars, trucks and SUVs in the 10-county Houston metropolitan area rose to 19,570 in March, up 26 percent from March ’09, according to the latest TexAuto Facts, published by InfoNation, Inc. of Sugar Land. At this time a year ago, vehicle sales was one of many local economic indicators in freefall. The strong March performance this year boosted the Q1/10 total to 59,471, up 15 percent from the same period last year. Houston’s performance parallels that of the nation, which posted gains of 24 percent for the month and 16 percent for the quarter.

Noting that Q1 sales represent an annualized rate of 238,000, InfoNation’s Steve McDowell said, “We anticipate modest increases in sales for the balance of the year. We are holding our current estimate of sales volume for 2010 in the Houston region at 252,000, an increase of 15 percent from 2009.”

GROSS RETAIL SALES

In Q3/09, gross retail sales in the Houston metro area totaled $18.7 billion, down 7 percent from $20.1 billion in Q3/08, according to the latest compilation by the state comptroller’s office. Just four of the 12 retail categories saw gains over the period: health and personal, up 11 percent; clothing stores, up 3 percent; sport, hobby and book stores, up 2 percent; and nonstore retailers (including online), up 13 percent. The Houston metro as a whole fared better than Texas, which saw instate sales decline 9 percent from Q3/08 to Q3/09. Harris County performed marginally better than the rest of the region, posting a loss of only 6 percent.

In the most recent four quarters—Q4/08 through Q3/09—gross retail sales in the Houston metro totaled $80.5 billion, 6 percent below the previous four quarters. The running four-quarter total has declined each quarter since peaking at $85.9 billion in Q4/08. (Net of inflation, the four-quarter total has fallen 10 percent from the high in Q1/08.)

Data are unaudited, and are subject to revision.

Skip Kasdorf
Manager, Economic Research
Greater Houston Partnership
Research Department
1200 Smith, Suite 700
Houston, TX 77002-4400
Phone: 713-844-3615
Fax: 713-844-0215
E-mail: kasdorf@houston.org
Visit us on the World Wide Web www.houston.org

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