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Electrical Marketing’s Leading Economic Indicators - July 2018

July 20, 2018
Permits and architect billings slipped but overall indicators look solid.

Total building permits drop in June due to tariff concerns. Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,273,000, -2.2% below the revised May rate of 1,301,000 and -3% below the June 2017 rate of 1,312,000, according to the U.S. Census Bureau. Single-family authorizations in June were at a rate of 850,000; +0.8% above the revised May figure of 843,000.

AIA Index drops in June but stays positive. Architecture firm billings slowed in June but remained positive for the ninth consecutive month, according to the American Institute of Architects (AIA). AIA’s Architecture Billings Index (ABI) score for June was 51.3 compared to 52.8 in May, which is positive since any score over 50 represents billings growth. June’s ABI shows that demand for architecture firm services continues to improve across all sectors.

“Architects continue to see increases in demand for their services this summer, with new project work coming in at a healthy pace,” said AIA Chief Economist Kermit Baker. “However, business conditions are beginning to vary across the country. While essentially remaining flat in the Northeast and Midwest, billings jumped in the South while dropping in the West.”

Purchasing Managers Index stays solid in June. The June PMI registered 60.2%, an increase of 1.5 percentage points from the May reading of 58.7 percent. Any reading over 50 points represents a growth environment. The PMI is based on the ISM’s monthly survey of industrial purchasing managers.

Conference Board’s Leading Economic Index still positive in May. The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.2% in May to 109.5 (2016 = 100), following a 0.4% increase in April, and a 0.4% increase in March. “While May’s increase in the U.S. LEI was slower than in recent months, the improvements in a majority of its components offset the declines in leading indicators of labor markets and residential construction,” said Ataman Ozyildirim, director of Business Cycles and Growth Research at The Conference Board. “The U.S. LEI still points to solid growth but the current trend, which is moderating, indicates that economic activity is not likely to accelerate.”