Electrical Marketing’s Leading Indicators, September 24, 2010

Sept. 24, 2010
ABI increases again in August. The Architecture Billings Index (ABI) published by the American Institute of Architects (AIA), Washington, D.C., increased for the third straight month in August

ABI increases again in August. The Architecture Billings Index (ABI) published by the American Institute of Architects (AIA), Washington, D.C., increased for the third straight month in August. The August ABI score was 48.2 points, up slightly from a reading of 47.9 points the previous month. This score reflects a continued decline in demand for design services (any score above 50 points indicates an increase in billings). The new projects inquiry index was also up, moving from 53.1 points to 54.6 points. The ABI reflects the approximate nine-to-twelve month lag time between architecture billings and construction spending.

“Project cancellations, regardless of when they happen in the design phase, continue to be the main roadblock to recovery for the construction sector,” said AIA Chief Economist Kermit Baker. “Numerous projects have been put on hold indefinitely over the last several months with little hope that they will be resumed. Work that is being done is more likely smaller renovation projects, as opposed to new buildings.”

Purchasing Managers Index (PMI) increases 0.8 points to 56.3%. Economic activity in the manufacturing sector expanded in August for the 13th consecutive month, and the overall economy grew for the 16th consecutive month, said the nation’s supply executives in the latest Manufacturing ISM Report On Business, published by the Institute for Supply Management, Tempe, Ariz. “Manufacturing activity continued at a very positive rate in August as the PMI rose slightly when compared to July,” says Norbert Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

Building permits up 1.8 percent in August. Both building permits and housing starts were up in August. According to the U.S. Census Bureau, privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 569,000 — 1.8 percent above the revised July rate of 559,000, but 6.7 percent below the August 2009 estimate of 610,000. Single-family authorizations in August were at a rate of 401,000, 1.2 percent below the revised July figure of 406,000.