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Electrical Marketing's Leading Indicators - May 19, 2023 Update

May 19, 2023
Building permits drop in April

Privately‐owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,416,000, -1.5% below the revised March rate of 1,437,000 and -21.1% below the April 2022 rate of 1,795,000. The latest data from the U.S. Census Bureau said single‐family authorizations in April were at a rate of 855,000, +3.1% above the revised March figure of 829,000. Authorizations of units in buildings with five units or more were at a rate of 502,000 in April.

Conference Board’s leading indicators sink further in March

The Conference Board Leading Economic Index (LEI) for the U.S. fell by -1.2% in March 2023 to 108.4 points (2016=100), following a decline of -0.5% in February. The LEI is down -4.5% over the six-month period between Sept. 2022 and March 2023.

“The U.S. LEI fell to its lowest level since Nov. 2020, consistent with worsening economic conditions ahead,” said Justyna Zabinska-La Monica, senior manager, Business Cycle Indicators, at The Conference Board. “The Conference Board forecasts that economic weakness will intensify and spread more widely throughout the United States economy over the coming months, leading to a recession starting in mid-2023.”

ISM’s Purchasing Managers Index inches up but remains in contraction territory. According to Timothy Fiore, chair of the Institute for Supply Management’s April Manufacturing Purchasing ISM Manufacturing Business Survey Committee, the April Manufacturing PMI registered 47.1% +0.8% higher than the 46.3% percent recorded in March. This figure indicates a fifth month of contraction after a 30-month period of expansion.


Baker-Hughes rig count sees significant drop.

The total U.S. rig count dropped by seven rigs to 748 operating oil and gas rigs in Baker-Hughes’ most recent rig count data for May 12. The Permian Basin was responsible for much of this decline, with a decrease of five rigs. The Eagle Ford Basin in Texas lost three rigs, which for the Baker Hughes data is a pretty significant drop because the data most often only changes by one or two rigs in a week. Despite the decline, the U.S. rig count is still tracking +6% over this time last year with an increase of 43 rigs.