Getty Images
Housing Construction 512ewtopsgettyimages 461908236justinsullivanhomebuilding595

Electrical Marketing's Leading Economic Indicators - June 23, 2023 Update

June 22, 2023

Building permits spike in May

Privately‐owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,491,000, +5.2% above the revised April rate of 1,417,000 but -12.7% below the May 2022 rate of 1,708,000. According to the latest U.S. Census Bureau data, single‐family authorizations in May were at a rate of 897,000, +4.8% above the revised April figure of 856,000. Authorizations of units in buildings with five units or more were at a rate of 542,000 in May.

“Mirroring rising builder sentiment, single-family permits and starts increased in May as builders boosted production to meet unmet demand,” said Alicia Huey, chairman of the National Association of Home Builders (NAHB) and a custom home builder and developer from Birmingham, AL, in the press release. “Despite elevated interest rates that make the cost of housing more expensive, the lack of existing home inventory in most markets is leading to increased demand for new construction.”

AIA’s billings index makes notable turn for the better

Architecture firms experienced a rebound in billings in May after a downturn in April, according to the latest Architecture Billings Index (ABI) from the American Institute of Architects (AIA) and Deltek. The index score for May was the highest it has been since Sept. 2022. Inquiries into new projects and design contracts also increased this month, reaching their highest levels since February.

 The billings score for April increased from 48.5 points in April to 51 points in May (any score above 50 points indicates an increase in firm billings). Firms also reported that inquiries into new projects accelerated to 57.2 points from 53.9 points the previous month. Further, the value of new design contracts also moved up to 52.3 points in May from 49.8 points in April.

 “The modest improvement in overall demand for architectural services that we saw last month is encouraging news,” said AIA Chief Economist Kermit Baker in the press release. “However, there continues to be variation in the performance of firms by regional location and building specialization. This suggests that overall business conditions for the profession likely will continue to be variable.”

 Click here to download a spreadsheet with this month's Electrical Marketing  Economic Indicators