Electrical Marketing's Leading Indicators

ABI looks solid

The Architecture Billings Index (ABI) jumped more than two points in December, its highest mark since 2007. Published by the American Institute of Architects (AIA), Washington, D.C., the ABI is a leading economic indicator of construction activity and reflects the approximate nine- to twelve-month lag time between architecture billings and construction spending. The AIA reported the December ABI score was 54.2 points, up from a reading of 52 points the previous month. This score reflects an increase in demand for design services (any score above 50 points indicates an increase in billings). The new projects inquiry index was 62.6 points, up slightly from a mark of 61.4 points in November.

“This is more promising news that the design and construction industry is continuing to move toward a recovery,” said AIA Chief Economist, Kermit Baker. “However, historically December is the most unpredictable month from a business standpoint, and therefore the most difficult month from which to interpret a trend. The coming quarter will give us a much better sense of the strength of the apparent upturn in design activity. ”

Purchasing Managers Index in solid growth territory

The Purchasing Managers Index (PMI) is on the rise, and increased +0.4 points to 57 points in December. Norbert Ore, chair of the Tempe, Ariz.-based Institute for Supply Management Manufacturing Business Survey Committee, which publishes the PMI, said, “The manufacturing sector continued its growth trend as indicated by this month's report. We saw significant recovery for much of the U.S. manufacturing sector in 2010. The recovery centered on strength in autos, metals, food, machinery, computers and electronics, while those industries tied primarily to housing continue to struggle.

“Additionally, manufacturers that export have benefitted from both global demand and the weaker dollar. December's strong readings in new orders and production, combined with positive comments from the panel, should create momentum as we go into the first quarter of 2011.”

Leading Economic Indicators rise again

The Conference Board Leading Economic Index (LEI) for the U.S. increased one percent in December to 112.4 following a 1.1 percent increase in November, and a 0.4 percent increase in October. Said Ken Goldstein, an economist at The Conference Board, “The four-month rise suggests the economy now has some wind in its sails; however, it still faces some strong headwinds in the medium-term. Overall economic activity is likely to continue to gain momentum in 2011.”

The Marketplace : Key Figures

MonthLatest monthPrevious monthMonth-over-month % changeYear agoYear-over-year % change2008 annualCONSTRUCTION New Construction Put in Place (billions of dollars, SAAR)³ Total NOV 810.23 806.69 0.4 861.51 -6 NA Offices NOV 22.59 22.98 -1.7 29.88 -24.4 NA Industrial NOV 33.83 34.64 -2.3 52.27 -35.3 NA Housing Starts DEC 529 553 -4.3 576 -8.2 586 Single-unit DEC 417 458 -9 486 -14.2 472 Mobile Homes NOV 44 44 0 49 -10.2 NA Employment, Construction DEC 5,501 5,762 -4.5 5,615 -2 5,614 Employment, Electrical NOV 765.9 767 -0.1 773.2 -0.9 NA Hourly Wage NOV 25.5 25.68 -0.7 24.81 2.8 NA PRODUCTION Industrial Production Index (1967=100)⁵ DEC 94.9 94.1 0.8 89.6 5.9 92.7 Construction Supplies Production Index⁵ DEC 80 80.6 -0.8 73.6 8.6 78.4 Employment, in Electrical Equipment & Supplies Mfg. Production Workers (Thousands)⁴ NOV 144 144.2 -0.1 142.5 1.1 NA Weekly Hours NOV 43.3 43.3 0 40.7 6.4 NA Hourly Wage NOV 16.42 16.65 -1.4 16.3 0.7 NA Electrical Power Output Index (1967=100)⁵ DEC 102.5 97.9 4.7 100.6 1.9 100.2 Machine Tool Orders* (Millions of dollars)² NOV 303.16 369.22 -17.9 153.87 97 NA Industrial Capacity Utilization (Percent, SA) ¹ DEC 73.55 73.23 0.3 69.06 4.5 71.94 TRADE Elec. Mfr. Shipments (Millions of dollars)² NOV 3,245 3,242 0.1 2,800 15.9 NA Elec. Mfr. Inventories (Millions of dollars)² NOV 4,838 4,838 0 4,130 17.1 NA Elec. Mfr. I/S Ratio NOV 1.491 1.492 -0.1 1.475 1.1 NA Elec. Mfr. New Orders (Millions of dollars)² NOV 3,759 3,420 9.9 2,950 27.4 NA Elec. Mfr. Unfilled Orders (Millions of dollars)² NOV 16,471 15,957 3.2 14,051 17.2 NA Exports, Electrical Machinery (f.a.s. millions of dollars)² NOV 6,394.00 6,780.00 -5.7 5,664.00 12.9 NA U.S. Dollar vs. Other Major Currencies (1973=100)⁵ DEC 99.9 99.2 0.7 101 -1 102 PRICES & INTEREST RATES Industrial Commodites Wholesale Price Index
(Bureau of Labor Statistics, 1967=100) DEC 191.5 189.7 0.9 180.4 6.2 187.1 Electrical Price Index (Electrical Marketing, 1997=100) DEC 141.3 141.1 0.2 137.1 3.1 138.9 Construction Materials Wholesale Price Index
(Bureau of Labor Statistics, 1982=100) DEC 207 206.1 0.4 202 2.5 205.6 Copper Price (Metals Week, cents per pound) JAN 440.31 420.97 4.6 337.85 30.3 346.47 Prime Rate⁵ DEC 3.3 3.3 0 3.3 0 3.3 Federal Funds Rate⁵ DEC 0.2 0.2 0 0.1 0.1 0.2 Mortgage Rate⁷ DEC 4.7 4.3 0.4 4.9 -0.2 4.7

*Several series related to employment are now being reported on a NAICS basis. Because of this change, some numbers are not directly comparable to previously reported data, but are consistent in year-over-year comparisons and comparisons shown in the table.

Sources: ¹McGraw-Hill Construction/Dodge; ²Dept. of Commerce; ³Manufactured Housing Institute; ⁴Dept. of Labor; ⁵Federal Reserve Board; ⁶The Association for Manufacturing Technology; ⁷Federal Home Loan Bank Board.

Note: Some figures shown — prime rate, for example — are averaged for month. NYA — not yet available

SA-seasonally adjusted. SAAR-seasonally adjusted annual rate. Source for chart: Global Insight.

For further information about construction starts, please contact Dodge Analytics at 1-800-591-4462