Single-family building permits sag in December
Privately‐owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,330,000, -1.6% percent below the revised November rate of 1,351,000 and -29.9% below the Dec. 2021 rate of 1,896,000. According to U.S. Census Bureau data, single‐family authorizations in December were at a rate of 730,000, -6.5% below the revised November figure of 781,000.
Conference Board's leading indicators slip again in December
The Conference Board Leading Economic Index (LEI) for the U.S. decreased by -1% in Dec. 2022 to 110.5 (2016=100), following a decline of -1.1% in November. The LEI is now down -4.2% over the six-month period between June and Dec. 2022.
“The U.S. LEI fell sharply again in December, continuing to signal recession for the US economy in the near term,” said Ataman Ozyildirim, senior director-Economics, at the Conference Board. Overall economic activity is likely to turn negative in the coming quarters before picking up again in the final quarter of 2023.”
AIA sees a bigger slowdown in nonresidential construction in 2024
While spending on nonresidential construction picked up momentum toward the end of 2022, construction spending will moderate in 2023 and slow significantly in 2024, according to a new report from the American Institute of Architects (AIA).
Despite macroeconomic headwinds such as inflation, rising interest rates and weak consumer sentiment scores, the AIA’s Consensus Construction Forecast panel — comprising of leading economic forecasters — is projecting nonresidential construction spending to grow +5.8% in 2023 but slow to under +1% in 2024. Similar to 2022, growth in construction spending in 2023 will be uneven with a projected +2.6% increase in the commercial sector, +15.1% for industrial facilities, and +4.1% for institutional buildings. “The U.S. economy will continue to face serious challenges as we move through 2023, dampening the construction outlook,” said AIA Chief Economist Kermit Baker in the press release. “However healthy architect and contractor project backlogs should ease the negative impact of an economic slowdown.”