Electrical Marketing's Leading Indicators

AIA Billings Index drops in January

A leading indicator of U.S. nonresidential construction spending fell in January to its lowest level since August 2009 as more construction projects were delayed or canceled. According to the American Institute of Architects, the Architecture Billings Index (ABI) was down last month 2.9 points to 42.5. The index has remained below 50 since January 2008 indicating soft demand for design services.

“Lending institutions are placing unusually stringent equity requirements on new developments,” said AIA Chief Economist Kermit Baker. “This serious situation is being compounded by a skittish bond market, decreased tax revenues for publicly financed projects and declining property values,” he said.

PMI Index registers strong gain in January

According the Purchasing Managers Index (PMI) published monthly by the Institute for Supply Management, Tempe, Ariz., economic activity in the manufacturing sector expanded in January for the sixth consecutive month and the overall economy grew for the ninth consecutive month. Said Norbert Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee, “The manufacturing sector grew for the sixth consecutive month in January as the PMI rose to 58.4 percent, its highest reading since August 2004 when it registered 58.5 percent. This month's report provides significant assurance that the manufacturing sector is in recovery.”

Leading Economic Index (LEI) points toward growth

The Conference Board's Leading Economic Index for the U.S. increased 0.3 percent in January, following a 1.2 percent gain in December and a 1.1 percent rise in November. Says Ataman Ozyildirim, an economist at the Conference Board, “The U.S. LEI has risen steadily for nearly a year, led by an improvement in financial markets and a manufacturing upturn. Consumer expectations and housing permits have also contributed to these gains over this period, but to a lesser extent — especially in recent months. Current economic conditions, as measured by the Conference Board Coincident Economic Index (CEI), have also improved modestly since July 2009, helped by strengthening industrial production, despite continued weakness in employment.”

The Marketplace : Key FiguresMonthLatest MonthPrevious MonthMonth-over-month % changeYear agoYear-over-year % change2009 annualCONSTRUCTIONNew Construction Put in Place (Billions of dollars, SAAR)² Offices DEC 33.43 32.75 2.1 51.58 -35.2 40.9 Industrial DEC 62.73 66.04 -5 70.17 -10.6 75.28 Total DEC 902.55 913.19 -1.2 1,002.13 -9.9 941.34 Housing Starts (Thousands of units, SAAR)² JAN 591 575 2.8 488 21.1 553 Single-unit JAN 484 477 1.5 357 35.6 440 Mobile Homes NOV 49 48 2.1 66 -25.8 NA Employment, Construction JAN 5,258 5,616 -6.4 6,154 -14.6 6,037 Employment, electrical DEC 765.3 773.2 -1 872.3 -12.3 795.8 Hourly Wage DEC 25.31 24.81 2 24.88 1.7 24.76 PRODUCTIONIndustrial Production Index (1967=100)⁵ JAN 101.1 100.1 0.9 100.1 0.9 98.2 Construction Supplies Production Index⁵ JAN 81.2 80.5 1 85.8 -5.3 82.4 Employment, in Electrical Equipment & Supplies Mfg. Production Workers (Thousands)⁴ DEC 140.7 142.5 -1.3 158.2 -11.1 146.7 Weekly Hours DEC 40.7 40.7 0 40.3 1 39.6 Hourly Wage DEC 16.35 16.3 0.3 15.91 2.8 16.11 Electrical Power Output Index (1967=100)⁵ JAN 112.1 110.8 1.2 112.3 -0.2 107.3 Machine Tool Orders* (Millions of dollars)² JAN 132.11 187.58 -29.6 91.39 44.6 NA Industrial Capacity Utilization (Percent, SA)¹ JAN 69.43 68.64 0.8 67.02 2.4 66.93 TRADEElec. Mfr. Shipments (Millions of dollars)² DEC 2,744 2,632 4.3 3,347 -18 NA Elec. Mfr. Inventories (Millions of dollars)² DEC 3,875 3,836 1 5,064 -23.5 4,139 Elec. Mfr. I/S Ratio DEC 1.412 1.457 -3.1 1.513 -6.7 1.585 Elec. Mfr. New Orders (Millions of dollars)² DEC 2,733 2,702 1.1 3,190 -14.3 NA Elec. Mfr. Unfilled Orders (Millions of dollars)² DEC 12,881 12,892 -0.1 14,671 -12.2 13,242 Exports, Electrical Machinery(f.a.s. millions of dollars)² DEC 5,954.00 5,664.00 5.1 5,376.00 10.8 63,949.00 U.S. Dollar vs. Other Major Currencies (1973=100)⁵ JAN 102.1 101.8 0.4 109.1 -6.4 105.9 PRICES & INTEREST RATESIndustrial Commodites Wholesale Price Index (Bureau of Labor Statistics, 1967=100) JAN 184.7 180.4 2.4 172.6 7 174.9 Electrical Price Index (Electrical Marketing, 1997=100) JAN 137.6 137.5 0.1 129.3 6.4 133.2 Construction Materials Wholesale Price Index (Bureau of Labor Statistics, 1982=100) JAN 202 202.2 -0.1 207 -2.4 202.9 Copper Price (Metals Week, cents per pound) FEB 307.38 337.85 -9 154.63 98.8 239.28 Prime Rate⁵ JAN 3.3 3.3 0 3.3 0 3.3 Federal Funds Rate⁵ JAN 0.1 0.1 0 0.2 0 0.2 Mortgage Rate⁷ JAN 5 4.9 0.1 5.1 0 5.0 *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.
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