Electrical Marketing’s Leading Economic Indicators - September 2016

Sept. 23, 2016
Let's do the data! The Marketplace : Key Figures - September 2016

DISC’s September Flash Update: Modest growth by 4Q 2016. Herm Isenstein, president, DISC Corp., Orange, Conn., says sluggish electrical market performance will continue for the short-term, but he sees a small break in the clouds by the end of the year. Says Isenstein, “This year’s performance is very weak, but we are looking for industry sales to break into the plus column by the fourth quarter of this year and continue on a modest growth path through the current industry business cycle.”

Architecture Billing Index sags in August. On the heels of six out of seven months of increasing levels of demand for design services, the Architecture Billings Index (ABI) published monthly by the American Institute of Architects (AIA), Washington, D.C., fell just below the growth mark in August. 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. AIA reported the August ABI score was 49.7, down from the mark of 51.5 in the previous month.

“This is only the second month this year where demand for architectural services has declined and it is only by a fraction of a point,” said AIA Chief Economist, Kermit Baker. “Given the solid numbers for new design contracts and project inquiries, it doesn’t appear that this is the beginning of a broader downturn in the design and construction industry.”

Purchasing Managers Index (PMI) drops into negative territory in August. The August PMI registered 49.4%, a decrease of 3.2 percentage points from the July reading of 52.6. In the PMI, part of the monthly Institute for Supply Management (ISM) Manufacturing Business Survey of purchasing managers, any mark above 50% indicates that respondents are bullish about future purchasing conditions.

Building permits down slightly in August. The U.S. Census Bureau said privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,139,000, 0.4% below the revised July rate of 1,144,000 and 2.3% below the August 2015 estimate of 1,166,000. Single-family authorizations in August were at a rate of 737,000, 3.7% above the revised July figure of 711,000.