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Electrical Marketing’s Leading Economic Indicators for June 2019

June 21, 2019
Mixed messages as PMI slips, ABI bounces back and Conference Board indicators look good.

Purchasing Managers Index slides again in May. The May Purchasing Managers Index stayed in growth territory with a reading of 52.1%, but it’s down 0.7% from the April reading of 52.8%, according to the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. Any reading over 50 points indicates a bullish trend. The index has slipped two months in a row.

AIA’s Architecture Billings Index bounces back in April. Following a sizable decrease in demand for design services in March, the April Architecture Billings Index (ABI) climbed back into positive territory, according to the American Institute of Architects (AIA), Washington, DC. AIA’s ABI score for April showed a small increase in design services at 50.5 in April, which is up from 47.8 in March. Any score above 50 indicates an increase in billings.

Additionally, business conditions remained strong at firms located in the South. Despite this and the positive overall billings score, most regional and sector indictors continue to display decreasing demand for design services.

“In contrast to 2018, conditions throughout the construction sector recently have become more unsettled,” said AIA Chief Economist Kermit Baker. “Though we may not be at a critical inflection point, the next several months of billing data will be indicative of the health of the industry going into 2020.”

Conference Board’s Leading Economic Index stays on growth track. The Leading Economic Index (LEI) for the U.S. increased 0.2 percent in April to 112.1 (2016 = 100), following a 0.3 percent increase in March, and a 0.2 percent increase in February. “The US LEI rose in April, the third consecutive increase, with a majority of the leading indicators making positive contributions,” said Ataman Ozyildirim, director of economic research at The Conference Board. “Stock prices, financial conditions, and consumers’ outlook on the economy buoyed the US LEI, although the manufacturing sector showed continuing weakness. The Conference Board expects economic growth to moderate toward 2 percent by year end. The current expansion will enter its 11th year in July, becoming the longest expansion in U.S. history.”