Single-family building permits increase in December
December building permits hit 1,495,000, +1.9% above the revised November rate of 1,467,000 and +6.1% above the Dec. 2022 rate of 1,409,000.
Single‐family authorizations in December were at a rate of 994,000, +1.7% above the revised November figure of 977,000. An estimated 1,469,800 building permits were issued in 2023, -11.7% below the 2022 figure of 1,665,100.
Billings remain a concern for architects
The AIA/Deltek Architecture Billings Index (ABI) remained below 50 points for December, indicating soft business conditions to close out 2023. The score of 45.4 points remained flat from November. Any score below 50 points indicates decreasing business conditions, but there are encouraging signs of the pipeline.
In addition, most firms report that over the past six months at least some projects have been significantly delayed, put on hold or even cancelled. On average, almost 30% of projects on a dollar basis have fallen into one of these categories.
Published by the American Institute of Architects (AIA) the ABI is a leading economic indicator of construction activity, providing an approximately nine-to-12-month glimpse into the future of nonresidential construction activity.
“Billings at firms declined for eight months of the year, and the last four months saw this overall weakness accelerate,” said Kermit Baker, AIA’s chief economist. "Fortunately, project backlogs at firms eased only slightly through the year despite the overall reported softness in billings.”
Decline in Conference Board's Leading Economic Index (LEI) slows down in December
The Conference Board Leading Economic Index (LEI) for the U.S. fell by -0.1% in Dec. 2023 to 103.1, following a -0.5% decline in November. The LEI contracted by -2.9% over the six-month period between June and Dec. 2023, a smaller decrease than its -4.3% contraction over the previous six months. Despite the overall decline, six out of LEI's 10 leading indicators made positive contributions in December. However, these improvements were more than offset by weak conditions in manufacturing, the high interest-rate environment, and low consumer confidence.