Houston economic indicator points toward expansion again

A full moon rises over the downtown Houston skyline. Houston’s economy last month showed signs of expanding for the first time since September. A full moon rises over the downtown Houston skyline. Houston’s economy last month showed signs of expanding for the first time since September. Photo: Scott Kingsley / Staff Photographer Photo: Scott Kingsley / Staff Photographer Image 1 of / 1 Caption Close Houston economic indicator points toward expansion again 1 / 1 Back to Gallery

Houston’s economy last month showed signs of expanding for the first time since September.

The Houston Purchasing Manager’s index, a well-regarded gauge of economic activity in the region, showed the local economy accelerating in January. It’s the first time in four months that the index, based on a survey of Houston area supply chain executives, indicated that the local economy was headed for expansion rather than contracting economic activity.

The index, which measures the direction of Houston’s economy by predicting likely shifts in production three-to-four months in advance, registered 52.5, up 5.1 points from December’s 47.4. Readings above 50 generally indicate an expansion, readings below 50 indicate a contraction in goods production, a leading indicator for the local economy.

On HoustonChronicle.com: Dallas Fed forecasts Texas economy will continue expansion through 2020

It’s calculated based on survey responses from local executives reporting prices, production, sales and inventories. In November, the index fell below 50 for the first time in three years.