Industrial purchasing managers remain bullish in May. The May Purchasing Managers Index (PMI) published monthly by the Tempe, Ariz.-based Institute for Supply Management registered 55.4%, an increase of 0.5% percentage point from April’s reading of 54.9%, indicating expansion in manufacturing for the 12th consecutive month.
Building permits dip in May. Recently released U.S. Census data shows residential building permits were at a seasonally adjusted annual rate of 991,000, 6.4% below the revised April rate of 1,059,000 and 1.9% below the May 2013 estimate of 1,010,000. Single-family authorizations in May were at a rate of 619,000, 3.7% above the revised April figure of 597,000. Authorizations of units in buildings with five units or more were at a rate of 347,000 in May.
AIA’s Architecture Billings Index back in positive territory. On the heels of consecutive months of decreasing demand for design services, the Architecture Billings Index (ABI) published monthly by the American Institute of Architects (AIA), Washington, D.C., has returned to positive territory. 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. AIA reported the May ABI score was 52.6 points, up sharply from a mark of 49.6 points in April.
This score reflects an increase in design activity (any score above 50 points indicates an increase in billings). The AIA has added a new indicator measuring the trends in new design contracts at architecture firms that can provide a strong signal of the direction of future architecture billings. The score for design contracts in May was 52.5.
“Volatility continues to be the watchword in the design and construction markets, with firms in some regions of the country, and serving some sectors of the industry, reporting strong growth, while others are indicating continued weakness,” said AIA Chief Economist Kermit Baker. “However, overall, it appears that activity has recovered from the winter slump, and design professions should see more positive than negative numbers in the coming months.”