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Electrical Marketing's Key Leading Economic Indicators

June 23, 2022
A mixed bag of leading economic indicators, with building permits, the Conference Board's Leading Economic Indicators, and freight rail down, but the Baker-Hughes rig index standing tall.

Single-family building permits drop -5.5% in May

Privately‐owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,695,000, -7% below the revised April rate of 1,823,000 but +0.2% above the May 2021 rate of 1,691,000. Single‐family authorizations in May were at a rate of 1,048,000, -5.5% below the revised April figure of 1,109,000.

Rig count increases in Texas

The Baker Hughes Rig Count for land-based rigs increased by five for the week ending June 10 with all of the increases coming in Texas’ Permian and Eagle Ford Basins. Those two basins, the nation’s largest, account for 56% of all drilling rigs. The Permian Rig count is up 46% year over year and the Eagle Ford rig count is up +106%.

Freight rail traffic lighter than last year

Total U.S. weekly rail traffic for the week ending June 11 was 510,295 carloads and intermodal units, down -3.6% compared with the same week last year, according data from the American Association of Railroads. Total combined U.S. traffic for 2022’s first 23 weeks was 11,377,777 carloads and intermodal units, a decrease of -3.5% compared to last year.

AAR says because freight rail traffic reflects demand for the products railroads haul, it’s a useful gauge of broader economic activity, both for specific industries and for the economy as a whole.

AIA's Architecture Billings Index (ABI) drops in May but remains in growth territory

Architecture firms reported increasing demand for design services in May, according to the latest data from The American Institute of Architects (AIA). The ABI score for May was 53.5 points. While this score is down from April’s score of 56.5 points, it still indicates very strong business conditions overall (any score above 50 points  indicates an increase in billings from the prior month). Also in May, both the new project inquiries and design contracts indexes expanded, posting scores of 63.9 points and 56.9 points respectively.

“The strength in design activity over the past three months has produced a broader base of gains. The Northeast region and institutional sector have struggled with slow billings activity, but now have posted consecutive months of positive scores.” said AIA Chief Economist Kermit Baker in the press release.. “With the improvement in inquiries and new design projects, demand for design services will likely remain high for the next several months, despite strong economic headwinds.” 

Conference Board’s leading indicators takes a tumble in May

The Leading Economic Indicators index (LEI) published monthly by the Conference Board decreased for the second month in a row with a -0.4% decline in May 2022 to 118.3 points (2016 = 100), following a -0.4% decline in April 2022. The LEI is now down -0.4% over the six-month period from November 2021 to May 2022.

“The US LEI fell again in May, fueled by tumbling stock prices, a slowdown in housing construction and gloomier consumer expectations,” said Ataman Ozyildirim, senior director of economic research at The Conference Board. “The index is still near a historic high, but the U.S. LEI suggests weaker economic activity is likely in the near term — and tighter monetary policy is poised to dampen economic growth even further.”