Building permits slip in September. Building permits in September dropped to a seasonally adjusted annual rate of 539,000, 5.6 percent below the revised August rate of 571,000 and 10.9 percent below the September 2009 estimate of 605,000. Single-family authorizations in September were at a rate of 405,000, 0.5 percent above the revised August figure of 403,000.
Architects rejoice as ABI goes positive. For the first time since January 2008, the Architecture Billings Index (ABI), published by the American Institute of Architects (AIA), Washington, D.C., showed growth in design activity in September, increasing for the fourth straight month.
As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lag time between architecture billings and construction spending. AIA reported the September ABI score was 50.4, up from a reading of 48.2 the previous month. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was also up sharply, moving from 54.6 to 62.3 — the highest mark since July 2007.
“This is certainly encouraging news, but we will need to see consistent improvement over the next few months in order to feel comfortable about the state of the design and construction industry,” said AIA Chief Economist Kermit Baker. “Still, the strong upturn in design activity in the commercial and industrial sector certainly suggests that this upturn can possibly be sustained.”
PMI tumbles. The Purchasing Managers Index (PMI) published by the Institute for Supply Management, Tempe, Ariz., slipped 1.9 points in September to 54.4 points but still remains in growth territory. Said Norbert Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee, “While the headline number shows relative strength this month as the PMI reading of 54.4 percent is still quite positive, the overall picture is less encouraging. The growth of new orders continued to slow, as the index is down significantly from its cyclical high of 65.9 percent (January 2010).”