Houston’s Monthly Metrics: October 2016
The following article originally appeared in the October newsletter to clients of Kiley Advisors, LLC for the purpose of providing the latest leading indicators and industry issues to those clients. Reprinted with permission.
Did Houston already go into a recession? Jesse Thompson, Business Economist at the Federal Reserve Bank of Dallas - Houston Branch, noted the Houston Business Cycle Index shows that Houston entered a recession late 2015/early 2016. He provided a chart (right) showing the correlation between rig count and Houston’s core oil and gas related employment noting “further revisions will like confirm what we’ve already observed: that Houston’s economy is contracting, and that Houston may or may not be out of it yet.”
However, fueling the recovery discussion is the renewed optimism in the Purchasing Managers Index’s oil and gas respondents, who for the first time in several months, seemed happier and more upbeat. The PMI itself increased to 46.1 in August – still in an overall contraction phase, but production, sales and new orders were all noticeably up, a leading indicator. [node:read-more:link]