Architectural Billings Index reflects uncertainty in construction market. Following a two-month soft patch the Architecture Billings Index (ABI) rose almost two full points in July. As a leading economic indicator of construction activity, the ABI reflects the approximate nine- to twelve-month lag time between architecture billings and construction spending. The American Institute of Architects (AIA), Washington, D.C., reported the July ABI score was 47.9 points, up from a reading of 46 points the previous month. This score reflects a continued decline in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index dropped substantially from 57.7 points to 53.1 points. “Business conditions at design firms remain quite volatile,” said AIA Chief Economist Kermit Baker. “While this recent uptick is encouraging, this state of the industry is likely to persist for a while as we continue to receive a mixed bag of feedback on the condition of the design market from improving to flat to being paralyzed by uncertainty.”
PMI drops for third month in a row. The Purchasing Managers Index dropped 0.7 percent in July to 55.5 points — 4.9 points off its recent high of 6.4 in April. The Institute for Supply Management (ISM), Tempe, Ariz., says any reading above 50 percent indicates that the manufacturing economy is generally expanding.
“Manufacturing continued to grow during July, but at a slightly slower rate than in June,” said Norbert Ore, chair of the ISM’s Manufacturing Business Survey Committee.”
Leading Economic Indicators (LEI) say no recession. The Conference Board’s (LEI) for the U.S. increased 0.1 percent in July to 109.8, following a 0.3 percent decline in June and a 0.5 percent increase in May. “The indicators point to a slow expansion through the end of the year,” says Ken Goldstein, a Conference Board economist. “With inventory rebuilding moderating, the industrial core of the economy has moved to a slower pace. There appears to be no change in the pace of the service sector. Combined, the result is a weak economy with little forward momentum. However, the good news is that the data do not point to a recession.”