Building permits on fast track in June. Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,343,000. This is 7.4% above the revised May rate of 1,250,000 and 30% above the June 2014 estimate of 1,033,000. Single-family authorizations in June were at a rate of 687,000, 0.9% above the revised May figure of 681,000. Authorizations of units in buildings with five units or more were at a rate of 621,000 in June, 16.1% up over May and 79% over June 2014.
Purchasing managers say expansion is in the air. Manufacturing expanded in June according to the Purchasing Managers Index (PMI) published monthly by the Institute for Supply Management (ISM), Tempe, Ariz. The June PMI registered 53.5%, an increase of 0.7 percentage point over the May reading of 52.8%. A reading above 50% indicates that the manufacturing economy is generally expanding.
AIA Architecture Billings Index pops in June. Paced by continued demand for projects such as new education and healthcare facilities, public safety and government buildings, the Architecture Billings Index (ABI) increased significantly in June following fluctuations earlier this year. The American Institute of Architects (AIA) reported the June ABI score was 55.7, up substantially from a mark of 51.9 in May.
This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 63.4, up from a reading of 61.5 the previous month. As a leading economic indicator of construction activity, the ABI reflects the approximate nine-to twelve-month lead time between architecture billings and construction spending.
“The June numbers are likely showing some catch-up from slow growth earlier this year,” said AIA Chief Economist Kermit Baker. “This is the first month in 2015 that all regions are reporting positive business conditions and aside from the multi-family housing sector, all design project categories appear to be in good shape. The demand for new apartments and condominiums may have crested with index scores going down each month this year and reaching the lowest point since 2011.”