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Electrical Marketing's Leading Economic Indicators - Sept. 23, 2022 Update
Privately‐owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,517,000, -10% below the revised July rate of 1,685,000 and is -14.4% below the August 2021 rate of 1,772,000. According to the U.S. Census Bureau, single‐family authorizations in August were at a rate of 899,000, -3.5% below the revised July figure of 932,000.
Architects still bullish on construction
AIA’s Architecture Billings Index (ABI) score for August rose to 53.3 points compared to 51 points in July (any score above 50 indicates an increase in billings). During August, the score for new project inquiries rose to 57.9 points from 56.1 points the previous month, while the design contracts score softened slightly with a score of 52.3 points, down from 52.9 points in July.
“While a strengthening billings score is encouraging, the flat scoring across regions and sectors is indicative of a nationwide deceleration over the next several months,” said AIA Chief Economist, Kermit Baker in the press release. “A variety of economic storm clouds continue to gather, but since design activity continues to increase, we can expect at least another 9–12-month runway before building construction activity is negatively affected.”
Home builders singing the blues in NAHB survey
In yet sign of the continuing slowdown in the housing market, builder sentiment fell for the ninth straight month in September, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
Builder confidence in the market for newly built single-family homes fell three points in September to 46 points, the lowest level since May 2014 with the exception of the spring of 2020, according to the HMI survey.
“Builder sentiment has declined every month in 2022, and the housing recession shows no signs of abating as builders continue to grapple with elevated construction costs and an aggressive monetary policy from the Federal Reserve that helped pushed mortgage rates above 6% last week, the highest level since 2008,” said NAHB Chief Economist Robert Dietz in the press release.