Building permit activity drop from May's pace.
Privately‐owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,598,000, - 5.1% below the revised May rate of 1,683,000 but +23.3% above the June 2020 rate of 1,296,000. According to the U.S. Census Bureau, single‐family authorizations in June were at a rate of 1,063,000, -6.3% below the revised May figure of 1,134,000.
Architects bullish on future but can't find enough workers.
Architects AIA’s Architecture Billings Index (ABI) score for June remained at an elevated level of 57.1 points in June (any score above 50 points indicates an increase in billings). During June, the new design contracts score also remained positive at 58.9 points but was not quite as strong as the 63.2-point reading in May.
“With the current pace of billings growth near the highest levels ever seen in the history of the index, we’re expecting a sharp upturn in nonresidential building activity later this year and into 2022,” said AIA Chief Economist Kermit Baker in the press release. “However, as is often the case when market conditions make a sudden reversal, concerns are growing about architecture firms not being able to find enough workers to meet the higher workloads. Nearly six in 10 firms report that they are having problems filling open architectural staff positions.”
Dodge Momentum Index dips in June.
Following six months of consecutive gains, the Dodge Momentum Index fell to 165.8 (2000=100) in June, down -5% from the revised May reading of 175.1. The Momentum Index, issued by Dodge Data & Analytics, is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.
The decline in June was the result of losses in both institutional planning, which fell -7%, and commercial planning, which lost -4%. Uncertain demand for some building types (such as retail and hotels), higher material prices, and continued labor shortages are weighing down new project planning. Even with June’s decline, however, the Momentum Index remains near a 13-year high and well above last year.
