Last updateThu, 19 Sep 2019 4pm

Houston Manufacturing Executives See Contraction Ahead

The Houston Purchasing Managers Index (PMI) registered 51.4 in July, slightly up from 51.2 in June. The region’s PMI has signaled expansion in overall economic activity for 36 consecutive months and manufacturing activity for 23 consecutive months.

“But the index that measures executives expectations for the next three months sunk further as executives see the sector contracting. The index fell to 48.7 from 49.4 in June,” The Houston Chronicle reports.

U.S. Companies Lead in Value Creation, Asia Catching Up

U.S. companies continue to lead the way among the world’s large-cap value creators, taking 7 of the top 10 spots and 11 of the top 20 for global large-cap companies in the 2019 Value Creators rankings released by Boston Consulting Group.

Only 2 of the top 10 large-cap value creators and 5 of the top 20 are based in Asia, reflecting the disproportionate number of North American companies that rank among the largest companies by market capitalization. But a look at performance beyond the top 20 large-cap value creators reveals a much different picture. Among the top 100 performers, 28% are North American and 55% are Asian. Similarly, among the 330 companies that rank in the top 10 in their industry, 29% are North American and 45% are Asian.

Global Manufacturing Off to Weak Start in Third Quarter

The downturn in the global manufacturing sector extended into its third consecutive month in July. Production and new order intakes declined further, as conditions in many domestic markets remained soft and international trade volumes continued to contract. These negative trends filtered through to the labor market, resulting in another round of job losses. At 49.3 in July, a tick below June’s reading of 49.4, the J.P. Morgan Global Manufacturing PMI signaled contraction for the third straight month and fell to its lowest level since October 2012.

Texas Manufacturing Continues Moderate Expansion

Texas factory activity continued to expand in July, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, moved from 8.9 to 9.3, indicating output growth continued at roughly the same pace as in June.

Other measures of manufacturing activity suggested a slightly faster expansion in July. The new orders index edged up to 5.5, and the growth rate of orders index rebounded into positive territory, climbing nine points to 2.7. The capacity utilization index inched up to 11.2, and the shipments index jumped nine points to 10.2. Perceptions of broader business conditions were less negative in July.

U.S. Added 164,000 Jobs in July

Total nonfarm payroll employment rose by 164,000 in July and the unemployment rate was unchanged at 3.7%, the U.S. Department of Labor reported. Notable job gains occurred in professional and technical services, health care, social assistance and financial activities.

Manufacturing employment was up 16,000 in July and has changed little thus far in 2019. Job gains in the industry had averaged 22,000 per month in 2018.

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