Electrical Marketing’s Leading Economic Indicators - May 2018

Mixed indicator from April building permits. The U.S. Census Dept. said privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,352,000, 1.8% below the revised March rate of 1,377,000, but 7.7% above the April 2017 rate of 1,255,000. Single-family authorizations in April were at a rate of 859,000, 0.9% above the revised March figure of 851,000.

April’s Architecture Billing Index reflects steady optimism. The American Institute of Architects (AIA), Washington, DC, said the AIA’s Architecture Billings Index (ABI) score for April was 52 points (any score over 50 is billings growth), which indicates the business environment continues to be healthy for architecture firms.

“While there was slower growth in April for new project work coming into architecture firms, business conditions have remained healthy for the first four months of the year,” said AIA Chief Economist Kermit Baker in the press release. “Although growth in regional design activity was concentrated at firms in the Sunbelt, there was balanced growth so far this year across all major construction sectors.”

Purchasing Managers Index (PMI) slides in April but still remains bullish. The April Purchasing Managers Index published by the Tempe, AZ-based Institute in the Supply Management’s Manufacturing ISM Report On Business registered 57.3%, a decrease of two percentage points from the March reading of 59.3%. Any reading over 50 points represents a growth environment. The PMI is based on the ISM’s monthly survey of industrial purchasing managers.

Value of new construction data takes analysts on dizzying ride. Robert Murray, the lead economist at Dodge Data & Analytics, urged caution when interpreting the most recent Value of New Construction data published by the U.S. Census Department.  According to the Dodge release, the value of new construction starts in April fell 13% from March, which had been 11% ahead of February and was the highest level of construction starts over the preceding six months. Murray said if you average the data from March and April,  construction activity is just slightly behind last year’s pace.