(Photo by David McNew/Getty Images)
Electricalmarketing 3329 Gettyimages 480270745oilgas595
Electricalmarketing 3329 Gettyimages 480270745oilgas595
Electricalmarketing 3329 Gettyimages 480270745oilgas595
Electricalmarketing 3329 Gettyimages 480270745oilgas595
Electricalmarketing 3329 Gettyimages 480270745oilgas595

Electrical Marketing's Leading Economic Indicators - October 2018

Oct. 19, 2018
September data shows some slowing but rig counts continue climb.

Building permits soften in September. Privately‐owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,241,000, -0.6% below the revised August rate of 1,249,000 and -1% below the Sept. 2017 rate of 1,254,000.  Single‐family authorizations in September were at a rate of 851,000, +2.9% above the revised August figure of 827,000. 

Commercial building activity slows in September. The Dodge Momentum Index dropped 2.6% in September to 159.5 (2000=100) from the revised August reading of 163.7. Published by Dodge Data & Analytics, the Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

The Momentum Index has now fallen for two consecutive months. However, due to a very strong reading in July, it increased 0.8% from the second quarter to the third quarter. The Momentum Index may seem to have lost some impetus, but this can be attributed to outsized gains in the late spring and summer. In fact, the Momentum Index is now returning to a more sustainable level of activity given the overall age of the current construction cycle.

In September, 12 projects each with a value of $100 million or more entered planning. The two leading institutional projects were a $175 million research lab in Waltham, MA, and the $150 million Creighton University Medical School building in Phoenix, AZ. The leading commercial projects were a $116 million warehouse in New Castle, DE, and a $100 million mixed-use commercial building in Los Angeles.

Texas continues to account for much of the increase in U.S. drilling activity. The U.S. Baker Hughes Rig Count added 11 drilling rigs last week and now stands at 1,063 as of Oct. 12. That’s up 135 rigs over the same time last year. Texas’ Permian Basin accounts for most of this increase, with 489 rigs now in operation. It’s up 105 rigs from Oct. 2017 and accounts for 46% of all U.S. rigs. Texas has the lion’s share of drilling activity right now with 532 total rigs. The state’s Eagle Ford Basin with 77 rigs has seen a much smaller increase, up 14 rigs YOY.