Leading Electrical Indicators - March 2014

Building permits show healthy increase. The U.S. Census Bureau said privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,018,000, 7.7% above the revised January rate of 945,000 and 6.9% above the February 2013 estimate of 952,000. Single-family authorizations in February were at a rate of 588,000, 1.8% below the revised January figure of 599,000. Authorizations of units in buildings with five units or more were at a rate of 407,000 in February.

FMI’s NRCI report shows 1Q 2014 growth in nonresidential construction market.  In the Nonresidential Construction Index Report (NRCI) published quarterly by FMI, Raleigh, N.C., the construction consulting firm is pointing toward expanding business conditions. Said the NRCI report, “It takes some time for the optimism in the overall economy to turn to projects sold and steel going up. Nonetheless, projects are steadily improving as the index bounced back 8.5 points in the first quarter, but only one point higher than the third quarter of 2013.”

AIA’s ABI Index shows slight gain in February. After starting out the year on a positive note, there was another minor increase in the Architecture Billings Index (ABI) last month. As a leading economic indicator of construction activity published by the American Institute of Architects (AIA), Washington, D.C., the ABI reflects the approximate nine- to twelve-month lead time between architecture billings and construction spending.

AIA reported the February ABI score was 50.7, up slightly from a mark of 50.4 in January. This score reflects an increase in design services, as any score above 50 indicates an increase in billings. The new projects inquiry index was 56.8, down from the reading of 58.5 the previous month.

“The unusually severe weather conditions in many parts of the country have obviously held back both design and construction activity,” said AIA Chief Economist Kermit Baker. “The March and April readings will likely be a better indication of the underlying health of the design and construction markets. We are hearing reports of projects that had been previously shelved for extended periods of time coming back online as the economy improves.”