Total building permits drop -9.5% in May
May building permits were at a seasonally adjusted annual rate of 1,386,000, -3.8% below the revised April rate of 1,440,000 and -9.5% below the May 2023 rate of 1,532,000. According to the Department of Commerce, single‐family authorizations in May were at a rate of 949,000, -2.9% below the revised April figure of 977,000.
Conference Board's U.S. Leading Indicators still soft, but no recession in sight
The Conference Board Leading Economic Index (LEI) for the U.S. decreased by -0.5% in May 2024 to 101.2 (2016=100), following a -0.6% percent decline in April. Over the six-month period between November 2023 and May 2024, the LEI fell by -2% — a smaller decrease than its -3.4% percent contraction over the previoussix months.
“The U.S. LEI fell again in May, driven primarily by a decline in new orders, weak consumer sentiment about future business conditions, and lower building permits,” said Justyna Zabinska-La Monica, senior manager, Business Cycle Indicators, at The Conference Board, in the press release.
Architects report softer business conditions in May
The score for the AIA/Deltek Architecture Billings Index (ABI) published monthly by the American Institute of Architects (AIA) and Deltek declined to 42.4 points in May, as more firms reported a decrease in billings than the month prior.
“The decline in the May ABI score continues a year and a half of weakness in design billings at U.S. architecture firms. However, firms only reported modest declines over the first half of this period,” said Kermit Baker, AIA’s chief economist. “Over the past nine months, volatility has increased, and scores have softened more significantly, with the May score the weakest reported since the end of the pandemic recession.”
The ABI score is a leading economic indicator of construction activity, providing an approximately nine-to-twelve-month glimpse into the future of nonresidential construction spending. The score is derived from a monthly survey of architectures that measures the change in the number of services provided to clients.
