Electrical Marketing's Leading Indicators

Big boost in building permits

The Department of Commerce reported that privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 594,000, 11.2 percent above the revised February rate of 534,000, but 13.3 percent below the March 2010 estimate of 685,000. Single-family authorizations in March were at a rate of 405,000; 5.7 percent above the revised February figure of 383,000.

March AIA Billings Index holding steady

The American Institute of Architects (AIA), Washington, D.C., reported the March ABI score was 50.5 points, a negligible decrease from a reading of 50.6 points the previous month. The new projects inquiry index was 58.7 points, up significantly from a mark of 56.4 points in February. This score reflects a modest increase in demand for design services (any score above 50 points indicates an increase in billings). 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 range of conditions reported continues to span a very wide spectrum with some firms reporting an improving business environment and even ramping up staffing, while others continue to operate in survival mode,” said AIA Chief Economist, Kermit Baker. “The catalyst for a more robust recovery is likely financing, with stronger growth occurring only when lending institutions begin approving credit for construction projects with much greater regularity.”

Purchasing Managers Index (PMI) decreases in March but still on solid ground

With a March reading of 61.2 points, 0.2 points off February, the PMI published monthly by the Institute for Supply Management, Tempe, Ariz., still points toward solid conditions in the industrial market. Commodity prices remain a concern, said Norbert Ore, chair of ISM's Manufacturing Business Survey Committee. “While manufacturers are benefiting from strength in new orders and production, there is significant concern with regard to commodity prices,” he said. “Many manufacturers indicate the prices they have to pay for inputs are rising, and there is concern about the impact of higher prices on their margins.”

The Marketplace : Key Figures

MonthLatest monthPrevious monthMonth-over-month % changeYear agoYear-over-year % change2010 annualCONSTRUCTION New Construction Put in Place (Billions of dollars, SAAR)² Total FEB 760.56 770.98 -1.4 815.8 -6.8 813.34 Offices FEB 21.25 21.66 -1.9 27.72 -23.3 24.43 Industrial FEB 29.6 28.03 5.6 42.67 -30.6 38.35 Housing Starts MAR 549 512 7.2 634 -13.4 585 Single-unit MAR 422 392 7.7 535 -21.1 472 Mobile Homes FEB 43 44 -2.3 52 -17.3 50 Employment, Construction MAR 5,183 5,074 2.1 5,213 -0.6 5,526 Employment, electrical FEB 713.9 713 0.1 705 1.3 723.2 Hourly Wage FEB 24.99 24.99 0 24.82 0.7 25.26 PRODUCTION Industrial Production Index (1967=100)⁵ MAR 93.6 92.8 0.8 88.4 5.9 90.1 Construction Supplies Production Index⁵ MAR 75.7 74.6 1.5 70.2 7.7 72.7 Employment, in Electrical Equipment & Supplies Mfg. Production Workers (Thousands)⁴ FEB 138 138.7 -0.5 134.2 2.8 136.3 Weekly Hours FEB 42.8 42.9 -0.2 41.1 4.1 42.2 Hourly Wage FEB 17.54 17.58 -0.2 16.44 6.7 16.51 Electrical Power Output Index (1967=100)⁵ MAR 100 98.2 1.9 98.9 1.1 100.6 Machine Tool Orders* (Millions of dollars)² FEB 304.12 339.72 -10.5 157.07 93.6 Industrial Capacity Utilization (Percent, SA)¹ MAR 75.81 75.29 0.5 70.13 5.7 71.87 TRADE Elec. Mfr. Shipments (Millions of dollars)² FEB 3,276 3,238 1.2 2,786 17.6 Elec. Mfr. Inventories (Millions of dollars)² FEB 4,679 4,538 3.1 4,208 11.2 4,555 Elec. Mfr. I/S Ratio FEB 1.428 1.401 1.9 1.51 -5.4 1.477 Elec. Mfr. New Orders (Millions of dollars)² FEB 3,452 3,626 -4.8 2,906 18.8 NA Elec. Mfr. Unfilled Orders (Millions of dollars)² FEB 17,706 17,530 1 14,374 23.2 15,441 Exports, Electrical Machinery(f.a.s. millions of dollars)² FEB 5,959.00 6,206 -4 5,714 4.3 76,736 U.S. Dollar vs. Other Major Currencies (1973=100)⁵ MAR 97.1 98.1 -1 102.2 -5 102.1 PRICES & INTEREST RATES Industrial Commodites Wholesale Price Index
(Bureau of Labor Statistics, 1967=100) MAR 200.1 196.1 2 185.6 7.8 187 Electrical Price Index
(Electrical Marketing, 1997=100) MAR 141.7 142.4 -0.5 138.3 2.5 139 Construction Materials Wholesale Price Index
(Bureau of Labor Statistics, 1982=100) MAR 210.8 209.1 0.8 204.6 3 205.7 Copper Price (Metals Week, cents per pound) APR 436.25 435.95 0.1 355.92 22.6 346.47 Prime Rate5 MAR 3.3 3.3 0 3.3 0 3.3 Federal Funds Rate⁵ MAR 0.1 0.2 0 0.2 0 0.2 Mortgage Rate⁷ MAR 4.8 5 -0.1 5 -0.1 4.7

*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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