The Houston economy continues to show robust health in retailing, energy, construction, real estate and manufacturing. The Houston purchasing managers index jumped from 58.2 in July to 64.3 in August, surging to levels higher than the national index, as local factories saw big gains in sales, production and hiring. Local purchasing managers also indicated more price increases and longer lead times from suppliers. Houston retailers continue to operate in a rapidly changing and highly competitive environment, but say that demand is strong and the current high levels of consumer confidence are a big plus. A worrisome upward trend in consumer bankruptcies is the only negative note.
Auto dealers report very good sales and spot shortages of some of the hottest selling vehicles.
The loss of Shell's Deer Park ethylene capacity has kept that market unexpectedly tight and prices up. This will change in the fourth quarter, however, as at least two new large plants will come on line and push prices down. Some discounting of current polyethylene prices was noted by respondents, and posted prices of polyvinyl chloride slipped by 2 cents per pound in August. Other plastics prices have been flat throughout the summer. Demand for most products remains very strong.