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Residential Construction Getty Images 993311030 Gregory Clifford 770
Residential Construction Getty Images 993311030 Gregory Clifford 770
Residential Construction Getty Images 993311030 Gregory Clifford 770
Residential Construction Getty Images 993311030 Gregory Clifford 770
Residential Construction Getty Images 993311030 Gregory Clifford 770

Electrical Marketing's Leading Economic Indicators - December 21, 2022 Update

Dec. 21, 2022

Building permits slide dramatically in November

Privately‐owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,342,000, -11.2% below the revised October rate of 1,512,000 and -22.4% below the November 2021 rate of 1,729,000. The U.S. Census Bureau said single‐family authorizations in November were at a rate of 781,000, -7.1% below the revised October figure of 841,000.

AIA architects report slippage in November billings but remain bullish about 2023

Demand for design services from architecture firms continued to decrease in November, according to the American Institute of Architects (AIA). The pace of decline during November accelerated from October, posting an Architecture Billings Index (ABI) score of 46.6 points from 47.7 points (any score below 50 indicates a decline in firm billings). The pace of inquiries into new projects slowed, but remained positive with a score of 52 points, however new design contracts remained in negative territory with a score of 46.9 points.

“Given the slowdown in new project work, many architecture firms will rely on their near record levels of backlogs to support revenue,” said AIA Chief Economist Kermit Baker in the press release. “Still, firm leaders remain largely optimistic about future business trends. Almost two-thirds of architecture firms project that 2023 will be either a good year or great year for their firm.”

Leading indicators continue downward trend in October

The Conference Board Leading Economic Index (LEI) for the U.S. decreased by -0.8% in October 2022 to 114.9 (2016=100), following a decline of -0.5% in September. The LEI is now down -3.2% over the six-month period between April and Oct. 2022, a reversal from its +0.5% growth over the previous six months.

“The U.S. LEI fell for an eighth consecutive month, suggesting the economy is possibly in a recession,” said Ataman Ozyildirim, senior director, Economics, at the Conference Board, in the press release. “The Conference Board forecasts real GDP growth will be +1.8% year-over-year in 2022, and a recession is likely to start around year-end and last through mid-2023.”