Electrical Marketing's Leading Indicators

ABI increases again in August

The Architecture Billings Index (ABI) published by the American Institute of Architects (AIA), Washington, D.C., increased for the third straight month in August. The August ABI score was 48.2 points, up slightly from a reading of 47.9 points the previous month. This score reflects a continued decline in demand for design services (any score above 50 points indicates an increase in billings). The new projects inquiry index was also up, moving from 53.1 points to 54.6 points. The ABI reflects the approximate nine-to-twelve month lag time between architecture billings and construction spending.

“Project cancellations, regardless of when they happen in the design phase, continue to be the main roadblock to recovery for the construction sector,” said AIA Chief Economist Kermit Baker. “Numerous projects have been put on hold indefinitely over the last several months with little hope that they will be resumed. Work that is being done is more likely smaller renovation projects, as opposed to new buildings.”

Purchasing Managers Index (PMI) increases 0.8 points to 56.3%

Economic activity in the manufacturing sector expanded in August for the 13th consecutive month, and the overall economy grew for the 16th consecutive month, said the nation's supply executives in the latest Manufacturing ISM Report On Business, published by the Institute for Supply Management, Tempe, Ariz. “Manufacturing activity continued at a very positive rate in August as the PMI rose slightly when compared to July,” says Norbert Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

Building permits up 1.8 percent in August

Both building permits and housing starts were up in August. According to the U.S. Census Bureau, privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 569,000 — 1.8 percent above the revised July rate of 559,000, but 6.7 percent below the August 2009 estimate of 610,000. Single-family authorizations in August were at a rate of 401,000, 1.2 percent below the revised July figure of 406,000.

The Marketplace : Key Figures

MonthLatest monthPrevious monthMonth-over-month % changeYear agoYear-over-year % change2009 annualCONSTRUCTION New Construction Put in Place Total JUL 805.16 813.11 -1 901.16 -10.7 907.63 Offices JUL 22.65 23.42 -3.3 37.78 -40 38.05 Industrial JUL 37.81 39.71 -4.8 58.17 -35 58.15 Housing Starts AUG 598 541 10.5 585 2.2 554 Single-unit AUG 438 420 4.3 482 -9.1 442 Mobile Homes JUL 52 56 -7.1 51 2.0 50 Employment, Construction AUG 5,914 5,862 0.9 6,185 -4.4 6,037 Employment, electrical JUL 768.4 756.6 1.6 803.6 -4.4 795.8 Hourly Wage JUL 25.38 25.31 0.3 25.25 0.5 24.76 PRODUCTION Industrial Production Index (1967=100)⁵ AUG 93.2 93.1 0.2 87.8 6.2 87.7 Construction Supplies Production Index⁵ AUG 79.7 79.1 0.8 75.9 5 75.4 Employment, in Electrical Equipment & Supplies Mfg. Production Workers (Thousands)⁴ JUL 144 142.7 0.9 144.8 -0.6 146.7 Weekly Hours JUL 41.7 42.2 -1.2 38.1 9.4 39.6 Hourly Wage JUL 16.8 16.27 3.3 16.3 3.1 16.11 Electrical Power Output Index (1967=100)⁵ AUG 101.4 103.2 -1.7 94.5 7.3 96.8 Machine Tool Orders* (Millions of dollars)² JUL 253.9 228.52 11.1 131.76 92.7 Industrial Capacity Utilization (Percent, SA)¹ AUG 72.29 72.16 0.1 67.48 4.8 67.04 TRADE Elec. Mfr. Shipments (Millions of dollars)² JUL 3,147 3,160 -0.4 2,758 14.1 Elec. Mfr. Inventories (Millions of dollars)² JUL 4,761 4,656 2.3 4,272 11.4 4,475 Elec. Mfr. I/S Ratio JUL 1.513 1.473 2.7 1.549 -2.3 1.596 Elec. Mfr. New Orders (Millions of dollars)² JUL 3,192 3,517 -9.2 2,722 17.3 Elec. Mfr. Unfilled Orders (Millions of dollars)² JUL 15,424 15,379 0.3 14,092 9.5 14,253 Exports, Electrical Machinery (f.a.s. millions of dollars)² JUL 6,414 6,500 -1.3 5,405 18.7 63,949 U.S. Dollar vs. Other Major Currencies (1973=100)⁵ AUG 102.6 103.4 -0.8 103.3 -0.7 105.6 PRICES & INTEREST RATES Industrial Commodites Wholesale Price Index (Bureau of Labor Statistics, 1967=100) AUG 187 186.8 0.1 177.7 5.2 174.9 Electrical Price Index (Electrical Marketing, 1997=100) AUG 138.7 138.1 0.4 134.9 2.8 133.1 Construction Materials Wholesale Price Inde (Bureau of Labor Statistics, 1982=100) AUG 206 206.3 -0.1 201.5 2.2 202.9 Copper Price (Metals Week, cents per pound) SEP 350.42 335.98 4.3 285.48 22.7 239.28 Prime Rate⁵ AUG 3.3 3.3 0 3.3 0 3.3 Federal Funds Rate⁵ AUG 0.2 0.2 0 0.2 0 0.2 Mortgage Rate⁷ AUG 4.4 4.6 -0.1 5.2 -0.8 5

*Several series related to employment are now being reported on a NAICS basis. Because of this change, some numbers are not directly comparable to previously reported data, but are consistent in year-over-year comparisons and comparisons shown in the table.

Sources: ¹McGraw-Hill Construction/Dodge; ²Dept. of Commerce; ³Manufactured Housing Institute; ⁴Dept. of Labor; ⁵Federal Reserve Board; ⁶The Association for Manufacturing Technology; ⁷Federal Home Loan Bank Board. Note: Some figures shown — prime rate, for example — are averaged for month. NYA — not yet available SA-seasonally adjusted. SAAR-seasonally adjusted annual rate. Source for chart: Global Insight. For further information about construction starts, please contact Dodge Analytics at 1-800-591-4462