Electrical Marketing's Key Economic Indicators

AIA's Billing Index remains solid in January

On the heels of consecutive months of strengthening business conditions, the Architecture Billings Index (ABI) published monthly by the American Institute of Architects (AIA), Washington, D.C., has now reached positive territory three months in a row. As a leading indicator of construction activity, the ABI reflects the approximate nine- to twelve-month lag time between architecture billings and construction spending.

AIA reported the January ABI score was 50.9 points, following a mark of 51 points in December. This score reflects a slight increase in demand for design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 61.2 points, down just a notch from a reading of 61.5 points the previous month.

“Even though we had a similar upturn in design billings in late 2010 and early 2011, this recent showing is encouraging because it's being reflected across most regions of the country and across the major construction sectors,” said AIA Chief Economist, Kermit Baker. “But because we still continue to hear about struggling firms and some continued uncertainly in the market, we expect that overall economic improvements in the design and construction sector to be modest in the coming months.”

Leading indicators continue pattern of slow improvement

The Conference Board Leading Economic Index (LEI) for the U.S. increased 0.4 percent in January to 94.9, following a 0.5 percent increase in December and a 0.3 percent increase in November. Said Ataman Ozyildirim, an economist at the Conference Board, “This fourth consecutive gain in the LEI reflected fairly widespread strength among its components, pointing to somewhat more positive economic conditions in early 2012. The LEI's increase in January was led not only by improving financial and credit indicators, but also rising average workweek in manufacturing. These both offset consumers' outlook about the economy, which remained pessimistic, though slightly less so.” Added Ken Goldstein, another Conference Board economist, “Recent data reflect an economy that started the year on a positive note. The LEI suggests these conditions will continue and could possibly even pick up this spring and summer.”

The Marketplace: Key Figures

Month Latest month Previous month Month-over-month % change Year ago Year-over-year % change 2011 annual CONSTRUCTIONNew Construction Put in Place
(Billions of dollars, SAAR)² Total DEC 816.38 804.04 1.5 782.88 4.3 786.51 Offices DEC 22.76 22.87 -0.5 22.91 -0.7 22.53 Industrial DEC 43.48 38.27 13.6 30.32 43.4 35.86 Housing Starts (Thousands of units, SAAR)² JAN 699 689 1.5 636 9.9 611 Single-unit JAN 508 513 -1 437 16.2 434 Mobile Home Shipments³
(Thousands of units, SAAR) DEC 58 63 -7.9 40 45 51 Employment, Construction Workers (Thousands)⁴ JAN 5,160 5,441 -5.2 5,046 2.3 5,504 Employment, Electrical Contractors (Thousands)⁴ DEC 722 724.1 -0.3 721.3 0.1 715.3 Hourly Wage, Electrical Contractors⁴ DEC 26 25.85 0.6 25.39 2.4 25.57 PRODUCTIONIndustrial Production Index (1967=100)⁵ JAN 95.9 95.9 0 92.8 3.4 93.8 Construction Supplies Production Index⁵
(1977=100-SA) JAN 78.9 79.2 -0.4 74.9 5.3 76.4 Employment in Electrical Equipment & Supplies Mfg.
Production workers (Thousands)⁴ DEC 141.5 140.7 0.6 138.3 2.3 139.2 Weekly hours DEC 44.9 44 2 43.8 2.5 43.2 Hourly wage DEC 18.5 18.44 0.3 17.15 7.9 17.99 Electric Power Output Index (1967=100)⁵ JAN 96.1 98.2 -2.1 102.5 -6.2 100.6 Machine Tool Orders* (Millions of dollars)⁶ DEC 485.37 405.63 19.7 398.61 21.8 Industrial Capacity Utilization (Percent, SA)¹ JAN 77.42 76.9 0.5 74.71 2.7 75.41 TRADEElectrical Mfrs' Shipments DEC 3,729 3,690 1.1 3,600 3.6 Electrical Mfrs' Inventories (Millions of dollars, SA)² DEC 4,882 4,857 0.5 4,814 1.4 4,881 Electrical Mfrs' Inventory-to-Shipments Ratio DEC 1.309 1.316 -0.5 1.337 -2.1 1.317 Electrical Mfrs' New Orders
(Millions of dollars, SA)² DEC 3,897 4,126 -5.6 4,094 -4.8 Electrical Mfrs' Unfilled Orders
(Millions of dollars, SA)² DEC 15,270 15,102 1.1 13,395 14 14,471 Exports, Electrical Machinery
(f.a.s. value in millions of dollars)² DEC 6,377 6,542 -2.5 6,653 -4.1 77,640 U.S. Dollar vs. Other Major Currencies (1973=100)⁵ JAN 99.8 100.5 -0.6 98.6 1.2 97.2 PRICES & INTEREST RATESIndustrial Commodities Wholesale Price Index
(Bureau of Labor Statistics, 1967=100) JAN 201.4 201.1 0.1 194.2 3.7 202.2 Electrical Price Index
(Electrical Marketing, 1997=100) JAN 141.8 141.6 0.1 142.3 -0.3 142.1 Construction Materials Wholesale Price Index
(Bureau of Labor Statistics, 1982=100) JAN 214.7 214.4 0.1 208.3 3.1 212.8 Copper Prices (Metals Week, cents per pound) FEB 389.73 370.87 5.1 453.17 -14 404.5 Prime Rate⁵ JAN 3.3 3.3 0 3.3 0 3.3 Federal Funds Rate⁵ JAN 0.1 0.1 0 0.2 -0.1 0.1 Mortgage Rate⁷ JAN 3.9 4 0 4.8 -0.8 4.5 *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.
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