Electrical Marketing's Leading Economic Indicators - Sept. 26, 2024

Single-family building permits increase

August building permits were at a seasonally adjusted annual rate of 1,475,000, +4.9%  above the revised July rate of 1,406,000, but -6.5% below the August 2023 rate of 1,578,000. Single-family authorizations in August hit 967,000, +2.8%  above the revised July figure of 941,000.

AIA architects still seeing slow demand

August marked the nineteenth consecutive month of declining billings for architecture firms, according to the latest data from the AIA/Deltek Architecture Billings Index (ABI). The pace of decline during August accelerated, posting an ABI score of 45.7 points, a decrease from 48.2 points in July. Any reading below 50 points or indicates slow business conditions.
“Unfortunately, even the impending interest rate cuts didn’t move the needle on project inquiries or new design contracts at architecture firms,” said Kermit Baker, AIA's chief economist, in the press release. “Hopefully, once the trajectory of further cuts gets clarified, delayed projects will restart, and new projects will gather momentum.”

Slide in new orders tamp down Conference Board optimism

The Conference Board Leading Economic Index (LEI) for the U.S. declined by -0.2% in August 2024 to 100.2 (2016=100), following an unrevised -0.6% decline in July. Between Feb. 2024 and Aug. 2024, the LEI fell by -2.3%, a smaller rate of decline than the -2.7% drop over the six-month period between August 2023 and Feb. 2024.
 “In August, the U.S. LEI remained on a downward trajectory and posted its sixth consecutive monthly decline,” said Justyna Zabinska-La Monica, senior manager, Business Cycle Indicators, at The Conference Board. “The erosion continued to be driven by new orders, which recorded its lowest value since May 2023. A negative interest rate spread, persistently gloomy consumer expectations of future business conditions, and lower stock prices after the early-August financial market tumult also weighed on the Index.
“Overall, the LEI continued to signal headwinds to economic growth ahead. The Conference Board expects U.S. real GDP growth to lose momentum in the second half of this as higher prices, elevated interest rates, and mounting debt erode domestic demand.”