Building Activity Indicators

DEFINITION of 'Building Activity Indicators'

Economic reports that tell investors about the current and projected level of demand for residential, commercial and/or industrial construction. Building activity indicators are an important sign of the strength of weakness of the broader economy, due to construction's important role in the economic sector. If businesses are willing to invest in new construction, it is a sign that the economy is doing well or poised to recover. If they aren't, the economy may be weak or headed for trouble.

BREAKING DOWN 'Building Activity Indicators'

One popular indicator of building activity is the Architecture Billings Index. This leading economic indicator asks architecture firms whether their billing activity grew, declined or remained flat in the previous month. Changes in architecture billings tell us what is likely to happen with construction spending nine to 12 months in the future. Other popular indicators of building activity include the U.S. Census Bureau's New Residential Construction Index and its New Residential Sales Index.

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  1. What's the difference between housing starts and building permits?

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  3. What economic indicators should an investor in the real estate sector consider?

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