Electrical Marketing’s Leading Economic Indicators - November 8, 2013

AIA’s Billing Index gains a half point in September. Showing a steady increase in the demand for design services, the Architecture Billings Index (ABI) continues to accelerate, as it reached its second highest level of the year. 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. The American Institute of Architects (AIA) reported the September ABI score was 54.3 points, up from a mark of 53.8 points in August. This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 58.6 points, down from the reading of 63 points the previous month.

“The prolonged economic downturn that has affected the design and construction industry has actually resulted in the increased productivity levels as reported by architecture firms,” said AIA Chief Economist Kermit Baker. “In addition to new approaches to business challenges, a very competitive marketplace, the utilization of new technologies, and a renewed focus on efficiency have architecture firms realizing all-time highs in workplace productivity, and these new efficiencies can greatly benefit clients from a project timeline and budget standpoint.”

PMI creeps up 0.2% in October. Economic activity in the manufacturing sector expanded in October for the fifth consecutive month and the overall economy grew for the 53rd consecutive month, according to the nation’s supply executives in the latest Manufacturing Report on Business published by the Institute for Supply Management (ISM), Tempe, Ariz. The closely watched Purchasing Managers Index (PMI) registered 56.4%, an increase of 0.2 percentage point from September’s reading of 56.2%. The PMI has increased progressively each month since June, with October’s reading reflecting the highest PMI in 2013. The New Orders Index increased slightly in October by 0.1 percentage point to 60.6%, while the Production Index decreased by 1.8 percentage points to 60.8 percent. Both the New Orders and Production Indexes have registered above 60% for three consecutive months.