Electrical Marketing’s Leading Economic Indicators

Dec. 18, 2015
Building permits soar 11% in October. Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,289,000, 11% above the revised October rate of 1,161,000 and 19.5% above the November 2014 estimate of 1,079,000.

Building permits soar 11% in October. Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,289,000, 11% above the revised October rate of 1,161,000 and 19.5% above the November 2014 estimate of 1,079,000. Single-family authorizations in November were at a rate of 723,000; 1.1% above the revised October figure of 715,000.

ABI leaves growth territory in November. As has been the case a few times already this year, the Architecture Billings Index (ABI) dipped in November. As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to twelve-month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the November ABI score was 49.3, down from the mark of 53.1 in the previous month. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 58.6, up just a nudge from a reading of 58.5 the previous month.

“Since architecture firms continue to report that they are bringing in new projects, this volatility in billings doesn’t seem to reflect any underlying weakness in the construction sector,” said AIA Chief Economist Kermit Baker. “Rather, it could reflect the uncertainty of moving ahead with projects given the continued tightness in construction financing and the growing labor shortage problem gripping the entire design and construction industries.”

Conference Board says 2016 economic outlook remains positive. The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.4% in November to 124.6 (2010 = 100), following a 0.6% increase in October, and no change in September. “The U.S. LEI registered another increase in November, with building permits, the interest rate spread, and stock prices driving the improvement,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “Although the six-month growth rate of the LEI has moderated, the economic outlook for the final quarter of the year and into the new year remains positive.”

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Photo by Craig Barritt/Getty Images for 160 Leroy Street
Electricalmarketing 360 Getty505933800housing595
Electricalmarketing 360 Getty505933800housing595
Electricalmarketing 360 Getty505933800housing595
Electricalmarketing 360 Getty505933800housing595
Electricalmarketing 360 Getty505933800housing595