Electrical Marketing's Leading Economic Indicators

No great news in Electrical Marketing's leading economic indicators, with the exception of the Architecture Billing Index published by the American Institute of Architects (AIA), which enjoyed a dramatic spike in the number of inquiries received by architectural firms last month (see article on page 4).

Institute for Supply Management's March PMI still wallowing in negative territory. The Purchasing Managers Index (PMI) moved up a half-point in March to 36.3 points from 35.8 points in February, remaining deep in negative territory. However, Norbert J. Ore, chair of the Institute for Supply Management Manufacturing Business Survey Committee, was optimistic about the jump in new orders. “The New Orders Index offers greater encouragement, as it rose above the 40-percent mark for the first time in seven months,” he said. A reading above 50 percent indicates the manufacturing economy is generally expanding.

March building permits still soft across all regions. The Northeast region was hit hardest, with total building permits last month down 24.3 percent. Other notable soft spots include the Southern region, where total permits were down 10.3 percent, and the Midwest, where single-family permits were down 20 percent. The West region showed no change in total permits and modest decline of 1.5 percent in single-family permits last month.

Conference Board Leading Economic Indicators decline again in March. This index has not risen in the past nine months. Building permits, stock prices and the index of supplier deliveries made large negative contributions to the index this month, more than offsetting continued positive contributions from real money supply and the yield spread. Three of the ten indicators that make up this index increased in March. The positive contributors were real money supply, interest rate spread and the index of consumer expectations. The negative contributors were building permits, stock prices, index of supplier deliveries (vendor performance), average weekly manufacturing hours, average weekly initial claims for unemployment insurance (inverted) and manufacturers' new orders for nondefense capital goods.

The Marketplace: Key Figures

Month Latest month Previous month Month-over-month % change Year ago Year-over-year % change 2008 annual CONSTRUCTION New Construction Put in Place Billions of dollars, (SAAR)² Total FEB 967.52 976.16 -0.9 1,075.30 -10 1,073.77 Offices FEB 50.13 49.62 1 56.96 -12 57.34 Industrial FEB 81.19 77.96 4.1 49.46 64.1 63.06 Housing Starts Thousands of units, (SAAR)² Total MAR 510 572 -10.8 988 -48.4 903 Single-unit MAR 358 358 0 711 -49.6 617 Mobile Homes FEB 51 54 -5.6 94 -45.7 82 Employment, Construction Workers (Thousands)⁴ MAR 6,113 6,152 -0.6 7,047 -13.3 7,215 Employment, Electrical Contractors (Thousands)⁴ FEB 824.7 846.6 -2.6 902.1 -8.6 909.8 Hourly Wage, Electrical Contractors⁴ FEB 24.39 24.57 -0.7 23.8 2.5 24.15 PRODUCTION Industrial Production Index (1967=100)⁵ MAR 97.4 98.8 -1.5 111.6 -12.8 108.8 Construction Supplies Production Index⁵ MAR 81.6 83.9 -2.8 103.3 -21 100.1 Employment, in Electical Equipment & Supplies Mfg. FEB 151.9 155.3 -2.2 158.7 -4.3 158.5 Weekly Hours FEB 40.3 40.2 0.2 42.4 -5 42.1 Hourly Wage FEB 15.8 15.63 1.1 15.55 1.6 15.71 Electrical Power Output Index (1967=100)⁵ MAR 106.9 106 0.9 110.5 -3.3 110.4 Machine Tool Orders* (Millions of dollars)⁶ FEB 103.1 88.49 16.5 304.87 -66.2 NA Industrial Capacity Utilization (Percent, SA)¹ MAR 65.83 66.9 -1.1 77.7 -11.9 75.05 TRADE Electrical Mfrs.' Shipments FEB 2,844 2,640 7.7 3,549 -19.9 NA Electrical Mfrs' Inventories (Millions of dollars, SA)² FEB 4,664 4,775 -2.3 5,351 -12.8 5,266 Electrical Mfrs' Inventory-to-Shipments Ratio FEB 1.64 1.809 -9.3 1.508 8.8 1.516 Electrical Mfrs.' New Orders (Millions of dollars, SA)² FEB 2,494 2,174 14.7 4,174 -40.2 NA Electrical Mfrs.' Unfilled Orders (Millions of dollars, SA)² FEB 13,885 14,235 -2.5 16,466 -15.7 15,601 Exports, Electrical Machinery (f.a.s. value in millions of dollars) ² FEB 4,701 4,877 -3.6 6,714 -30 81,985 U.S. Dollar vs. Other Major Currencies (1973=100)⁵ MAR 112.5 111.8 0.7 95.8 17.5 99.8 PRICES & INTEREST RATES Industrial Commodities Wholesale Price Index (Bureau of Labor Statistics, 1967=100) MAR 169.5 170.9 -0.8 190.2 -10.9 192.3 Electrical Price Index (Electrical Marketing, 1997=100) MAR 129.6 129.4 0.2 136.5 -5 135.1 Construction Materials Wholesale Price Index (Bureau of Labor Statistics, 1982=100) MAR 204.2 204.9 -0.3 197.3 3.5 205.3 Copper Prices (Metals Week, cents per pound) APR 205.95 175.7 17.2 397.94 -48.2 317.3 Prime Rate⁵ MAR 3.3 3.3 0 5.7 -2.4 5.1 Federal Funds Rate⁵ MAR 0.2 0.2 0 2.6 -2.4 1.9 Mortgage Rate⁷ MAR 5.0 5.1 -0.1 6.0 -1 6.0 *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.

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