Electrical Marketing’s Leading Economic Indicators

Building permits see 3.6% bump in November. November building permits were at a seasonally adjusted annual rate of 899,000, 3.6% above the revised October rate of 868,000 and 26.8% above the Nov. 2011 estimate of 709,000, according to the Department of Commerce. Single-family authorizations in November were at a rate of 565,000, 0.2% below the revised October figure of 566,000. Authorizations of units in buildings with five units or more were at a rate of 307,000 in November.

PMI slips 2.2 points in November. The Purchasing Managers Index dropped into negative-growth territory of below 50 points in November with a 49.5-point reading. According to the Institute for Supply Management, Tempe, Ariz., November’s PMI is its lowest level since July 2009 when it registered 49.2 points. The New Orders Index also decreased in November with a 50.3% reading, a decrease of 3.9 points from October.

Architecture Billings Index up 1.2 points in October. Billings at architecture firms accelerated to their strongest pace of growth since Dec. 2010, according to the American Institute of Architects (AIA), Washington, D.C.

As a leading economic indicator of construction activity, the Architecture Billings Index (ABI) reflects the approximate nine- to twelve-month lag time between architecture billings and construction spending. The AIA reported the October ABI score was 52.8 points, up from the mark of 51.6 points in September. This score reflects an increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.4 points, compared to a mark of 57.3 points the previous month.

“With three straight monthly gains and the past two being quite strong, it’s beginning to look like demand for design services has turned the corner,” said AIA Chief Economist Kermit Baker. “With 2012 winding down on an upnote and with the national elections finally behind us, there is a general sense of optimism. However, this is balanced by a tremendous amount of anxiety and uncertainty in the marketplace, which likely means that we’ll have a few more bumps before we enter a full-blown expansion.”