Electrical Marketing’s Leading Economic Indicators - April 2017

Building permits increase in March. Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,260,000, 3.6% above the revised February rate of 1,216,000 and 17% above the March 2016 rate of 1,077,000. Single-family authorizations in March were at a rate of 823,000, 1.1% below the revised February figure of 832,000.

PMI decreases in March but still bullish. The Institute for Supply Management’s (ISM) March Purchasing Managers Index (PMI) registered 57.2%, a decrease of 0.5 percentage point from the February reading of 57.7%. Any reading over 50 points means purchasing managers are optimistic about the business climate. ISM said its survey of purchasing managers showed that the overall economy grew for the 94th consecutive month.

ABI looks solid in 1Q 2017. 1Q 2017 ended on a positive note for AIA’s (Architecture Billings Index (ABI), as the March ABI score was 54.3, up from a score of 50.7 in 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 first quarter started out on uneasy footing, but fortunately ended on an upswing  entering the traditionally busy spring season,” said AIA Chief Economist Kermit Baker.  “All sectors showed growth except for the commercial/industrial market, which, for the first time in over a year displayed a decrease in design services.”

Conference Board economist likes what he sees for 2017. The Conference Board’s Leading Economic Index (LEI) for the U.S. increased 0.4% in March to 126.7 (2010 = 100), following a 0.5% increase in February, and a 0.6% increase in January. “The March increase and upward trend in the U.S. LEI point to continued economic growth in 2017, with perhaps an acceleration later in the year if consumer spending and investment pick up,” said Ataman Ozyildirim, the Conference Board’s director of business cycles and growth research. “The gains among the leading indicators were very widespread, with new orders in manufacturing and the interest rate spread more than offsetting declines in the labor market components in March.”