Houston Economy Closes Out 2016 With Another Positive Business Report

Dave Fehling

In December, the monthly Purchasing Managers Index gave Houston its third positive report in a row – meaning the local economy continues on a path to expansion.

It's a survey of supply chain leaders and measures economic activity in the city's major industries based on eight indicators – such as employment, sales and production.

"We're seeing fairly significant strengthening in most of the underlying industries, particularly oil and gas," said Ross Harvison, who compiles the report for the Institute for Supply Management.

The index had shown contraction for 21 months until October, when it rose above the neutral level.

Harvison believes Houston will continue to see modest growth in 2017, "unless we see major impacts on oil prices and we see oil prices fall, but I think most economists believe that a $50 to $60 a barrel oil range is reasonable near-term."

He said he's closely watching the healthcare sector, which is growing but not at the strength it was a few years ago.