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Electrical Marketing's Leading Economic Indicators - March, 26, 2021 Update

March 25, 2021
AIA's Architecture Billings Index continued its march deeper into positive territory.

Single-family building permits drop a surprising -10.8% in January

Privately-owned housing units authorized by building permits in February were at a seasonally adjusted annual rate of 1,682,000, -10.8% below the revised January rate of 1,886,000, but +17% above the February 2020 rate of 1,438,000. Single-family authorizations in February were at a rate of 1,143,000, -10% below the revised January figure of 1,270,000. Authorizations of units in buildings with five units or more were at a rate of 495,000 in February.

“While single-family starts for the first two months of the year are +6.4% higher than the first two months of 2020, there has been a +36% gain over the last 12 month of single-family homes permitted but not started as some projects have paused due to cost and availability of materials,” said Robert Dietz, chief economist for the National Association of Home Builders (NAHB), Washington, DC.

AIA’s billings index moves into positive territory

Continuing the positive momentum of a nearly three-point bump in January, the Architecture Billings Index (ABI) reached its first positive mark since Feb. 2020, according to the latest data from the American Institute of Architects (AIA), Washington, DC.

AIA’s ABI score for February was 53.3 points compared to 44.9 points in January (any score above 50 points indicates an increase in billings). February also marked the first time the design contract score rose back into positive territory since the pandemic began with a score of 51.6 points compared to 48.8 points in January. The new project inquiries score for February reached a 22-month high water mark with a score of 61.2 points compared to 56.8 points in January.

“Hopefully, this is the start of a more sustained recovery. It’s possible that scores will continue to bounce above and below 50 points for the next few months, as recoveries often move in fits and starts,” said AIA Chief Economist, Kermit Baker. “Beyond the encouraging billing data, architecture employment added 700 new positions in January and has now regained 45% of the jobs that were lost since the beginning of the pandemic.”