Electrical Marketing's Leading Economic Indicators - July 24, 2020 Update

Building permits see solid gain in June. Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,241,000, +2.1% above the revised May rate of 1,216,000, but - 2.5% below the June 2019 rate of 1,273,000. According to the latest U.S. Census Dept. data, single-family authorizations in June were at a rate of 834,000, +11.8% above the revised May figure of 746,000.

Architects see improved business conditions in June. Demand for design services from architecture firms began to stabilize in June following peak declines in April, according to a new report from the American Institute of Architects (AIA).

AIA’s Architecture Billings Index (ABI) score for June was 40 points, compared to 32 points in May. The May ABI score indicates that a significant share of architecture firms still saw their billings decline from May to June, however the share reporting declines slowed significantly. Index scores for new project inquiries and new design contracts also showed signs of stabilizing, posting scores of 49.3 points and 44 points, respectively.

“While business conditions remained soft at firms across the country, those with a multi-family residential specialization saw the most positive signs,” said AIA Chief Economist Kermit Baker. “Unfortunately, conditions at firms with a commercial/industrial specialization are likely to remain weak for an extended period of time, until hospitality, office and retail facilities can fully reopen, and design demand for this space begins to increase.”

Rail traffic still way down YOY, but shows some improvement in mid-July. While down over last year’s pace, this leading indicator is showing some smaller weekly declines. The Association of American Railroads (AAR) said total carloads for the week ending July 18 were 214,685 carloads, down -15.7% compared with the same week in 2019. Commodity groups that posted decreases compared with the same week in 2019 included coal, down 22,464 carloads to 56,202; metallic ores and metals, down 6,659 carloads to 15,766; and nonmetallic minerals, down 6,108 carloads to 30,986.