Building permits up 35.2% YTY in January. The Department of Commerce reports that privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 925,000, 1.8% above the revised December rate of 909,000 and 35.2% above the January 2012 estimate of 684,000. Single-family authorizations in January were at a rate of 584,000, 1.9% above the revised December figure of 573,000. Authorizations of units in buildings with five units or more were at a rate of 311,000 in January.
Architecture Billings Index shows strongest growth since Nov. 2007. Published by the American Institute of Architects (AIA), Washington, D.C., the ABI is a leading economic indicator of construction activity reflecting the approximate nine- to twelve-month lag time between architecture billings and construction spending. AIA reported the January ABI score was 54.2 points, up sharply from a mark of 51.2 points in December. This score reflects a strong increase in demand for design services (any score above 50 points indicates an increase in billings). The new projects inquiry index was 63.2 points, much higher than the reading of 57.9 points the previous month.
“We have been pointing in this direction for the last several months, but this is the strongest indication that there will be an upturn in construction activity in the coming months,” said AIA Chief Economist, Kermit Baker. “But as we continue to hear about overall improving economic conditions and that there are more inquiries for new design projects in the marketplace, a continued reservation by lending institutions to supply financing for construction projects is preventing a more widespread recovery in the industry.” (Note: For those of you keeping score at home, every January the AIA research department updates the seasonal factors used to calculate the ABI, resulting in a revision of recent ABI values.)
Purchasing Managers Index jumps almost three points. The Institute for Supply Management, Tempe, Ariz., said its Purchasing Managers Index now stands at 53.1, up 2.9 points from December. Any mark over 50 indicates expansion in the manufacturing sector.