Electrical Marketing's Leading Indicators

AIA's Billing Index Up in March

On the heels of a more than two-point gain in February, the Architecture Billings Index (ABI) was up again in March. As a leading economic indicator of construction activity published each month by the American Institute of Architects (AIA), Washington, D.C., the ABI reflects the approximate nine-to-twelve month lag time between architecture billings and construction spending. The AIA reported the March ABI rating was 46.1 points, up from a reading of 44.8 points the previous month.

“This is certainly an encouraging sign that we could be moving closer to a recovery phase, even though we continue to hear about mixed conditions across the country,” said AIA's Chief Economist Kermit Baker. “Firms are still reporting an unusual amount of variation in the level of demand for design services, from improving to poor to virtually non-existent. This increasing volatility is often a sign that overall business conditions may begin to change in the coming months.”

PMI Index gains 3.1 points in March

Purchasing managers at industrials remain optimistic, according to the latest Purchasing Managers Index published by the Institute for Supply Management (ISM), Tempe, Ariz. “The manufacturing sector grew for the eighth consecutive month during March,” said Norbert Ore, chair of the ISM's Manufacturing Business Survey Committee. “The rate of growth as indicated by the PMI is the fastest since July 2004. Both new orders and production rose above 60 percent this month, closing the first quarter with significant momentum going forward.”

Leading Economic Index registers biggest gain in three months

The Conference Board Leading Economic Index (LEI) for the U.S. increased 1.4 percent in March, following a 0.4 percent gain in February and a 0.6 percent rise in January. Says Ataman Ozyildirim, an economist at The Conference Board, “The U.S. LEI has risen steadily for a year, and its six-month growth rate has remained fairly stable in recent months — led by improvements in financial and labor market indicators. Payroll employment made its first substantial contribution to the coincident economic index, suggesting a recovery that is beginning to gain traction.”

The Marketplace : Key Figures

month Latest Month Previous Month Month-over-month % change Year ago Year-over-year % change 2008 annual CONSTRUCTIONNew Construction Put in Place (Billions of dollars, SAAR)² Total FEB 846.23 857.8 -1.3 970.41 -12.8 937.58 Offices FEB 29.96 30.56 -2.0 48.42 -38.1 40.68 Industrial FEB 52.77 51.03 3.4 81.31 -35.1 74.61 Housing Starts (Thousands of units, SAAR)² MAR 626 616 1.6 521 20.2 553 Single-unit MAR 531 536 -0.9 361 47.1 441 Mobile Homes FEB 50 49 2.0 52 -3.8 50 Employment, Construction MAR 5,276 5,152 2.4 5,950 -11.3 6,037 Employment, Electrical FEB 727.1 735.5 -1.1 814.1 -10.7 795.8 Hourly Wage FEB 24.84 24.74 0.4 24.39 1.8 24.76 PRODUCTIONIndustrial Production Index (1967=100)⁵ MAR 101.6 101.5 0.1 97.7 4.0 98.2 Construction Supplies Production Index⁵ MAR 82.5 80.7 2.3 82.7 -0.2 82.3 Employment, in Electrical Equipment & Supplies Mfg. Production Workers (Thousands)⁴ FEB 140.4 141.3 -0.6 153.6 -8.6 146.7 Weekly Hours FEB 41.3 41.4 -0.2 40.3 2.5 39.6 Hourly Wage FEB 16.22 16.46 -1.5 15.8 2.7 16.11 Electrical Power Output Index (1967=100)⁵ MAR 107.2 113.7 -5.7 108.5 -1.1 107.5 Machine Tool Orders* (Millions of dollars)² FEB 155.72 119.27 30.6 107.77 44.5 Industrial Capacity Utilization (Percent, SA)¹ MAR 70.47 69.73 0.7 66.07 4.4 66.94 TRADEElec. Mfr. Shipments (Millions of dollars)² FEB 2,581 2,463 4.8 2,746 -6.0 Elec. Mfr. Inventories (Millions of dollars)² FEB 3,869 3,830 1.0 4,550 -15 4,135 Electrical Mfrs' Inventory-to-Shipments Ratio FEB 1.499 1.555 -3.6 1.657 -9.5 1.585 Elec. Mfr. New Orders
(Millions of dollars)² FEB 2,657 2,729 -2.6 2,355 12.8 Elec. Mfr. Unfilled Orders
(Millions of dollars)2 FEB 13,227 13,151 0.6 13,831 -4.4 13,242 Exports, Electrical Machinery
(f.a.s. millions of dollars)² FEB 5,714 5,709 0.1 4,701 21.5 63,949 U.S. Dollar vs. Other Major Currencies (1973=100)⁵ MAR 102.9 103.7 -0.8 112.5 -8.5 105.9 PRICES & INTEREST RATESIndustrial Commodites Wholesale Price Index
(Bureau of Labor Statistics, 1967=100) MAR 185.7 183.5 1.2 169.5 9.6 174.9 Electrical Price Index
(Electrical Marketing, 1997=100) MAR 138.4 136.8 1.2 129.4 7 133.2 Construction Materials Wholesale Price Index
(Bureau of Labor Statistics, 1982=100) MAR 204.8 203.5 0.6 204.2 0.3 202.9 Copper Price (Metals Week, cents per pound) APR 360.99 343.54 5.1 208.61 73 239.28 Prime Rate⁵ MAR 3.3 3.3 0 3.3 0 3.3 Federal Funds Rate⁵ MAR 0.2 0.1 0 0.2 0 0.2 Mortgage Rate⁷ MAR 5.0 5.0 0 5.0 0 5.0 *Several series related to employment are now being reported on a NAICS basis. Because of this change, some numbers are not directly comparable to previously reported data, but are consistent in year-over-year comparisons and comparisons shown in the table.

Sources: ¹McGraw-Hill Construction/Dodge; ²Dept. of Commerce; ³Manufactured Housing Institute; ⁴Dept. of Labor; ⁵Federal Reserve Board; ⁶The Association for Manufacturing Technology; ⁷Federal Home Loan Bank Board. Note: Some figures shown — prime rate, for example — are averaged for month. NYA — not yet available SA?seasonally adjusted. SAAR-seasonally adjusted annual rate. Source for chart: Global Insight. For further information about construction starts, please contact Dodge Analytics at 1-800-591-4462