Electrical Marketing's Leading Economic Indicators - July 28, 2023 Update

Single-family building permits increase in June

Privately‐owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,440,000, -3.7% below the revised May rate of 1,496,000 and is -15.3% below the June 2022 rate of 1,701,000. The U.S. Census Bureau said single‐family authorizations in June were at a rate of 922,000, +2.2% above the revised May figure of 902,000.

AIA's Architecture Billing Index (ABI) gains momentum in June

The ABI score of 50.1 points for the month indicates that billings at architecture firms remained steady as design activity continues to slowly recover from roiled economic conditions. This also marks the first time since last fall that there have been two consecutive months of scores above 50 points, although growth in June was weaker than May (any score above 50 points indicates an increase in firm billings).

“It’s encouraging to see two consecutive months of stability in billings after a couple quarters of weakness due to high inflation, rising interest rates, and increased construction costs,” said AIA Chief Economist Kermit Baker, in the press release. “We are still facing some headwinds in the broader economy, but this respite suggests that market conditions may be finding firmer ground.”

Conference Board declines again in July

The Conference Board Leading Economic Index (LEI) for the U.S. declined by -0.7% in June 2023 to 106.1 (2016=100), following a decline of -0.6% n May. The LEI is down -4.2% over the six-month period between December 2022 and June 2023 — a steeper rate of decline than its -3.8% contraction over the previous six months (June to December 2022).

“The U.S LEI fell again in June, fueled by gloomier consumer expectations, weaker new orders, an increased number of initial claims for unemployment and a reduction in housing construction,” said Justyna Zabinska-La Monica, senior manager, Business Cycle Indicators, at The Conference Board, in the press release. “The Leading Index has been in decline for fifteen months — the longest streak of consecutive decreases since 2007-08, during the run-up to the Great Recession. The U.S. economy is likely to be in recession from Q3 2023 to Q1 2024.”