US home building up in Feb but likely to fall more

20 March 2007 14:08  [Source: ICIS news]

WASHINGTON (ICIS news)--US home construction recovered somewhat in February with a 9% gain compared with the 14% drop in January, the Commerce Department said on Tuesday, but a decline in building permits suggests the housing downturn will continue.

 

The department said that privately owned housing starts in February were at a seasonally adjusted annual rate of 1.525m, nearly 10% above the revised January estimate of 1.4m homes under construction.

 

However, the February housing starts figure was still 28.5% below the rate of new home construction seen in February last year when work began on 2.13m new homes.

 

The housing market is a key downstream consumer sector for the chemicals industry, driving demand for a wide variety of chemicals and chemicals-based products such as plastic pipe, insulation, paints and coatings, adhesives and synthetic fibres, among many others.

 

Other department home construction data indicate that the decline in home building has yet to hit bottom. 

 

The department said that 1.532m building permits were issued across the country in February - also on a seasonally adjusted and annualised basis - representing a 2.5% decline from January, which in turn was off 3% from December.

 

Building permits are filed with local governments by construction contractors when they are ready to begin work and consequently are seen as a good near-term indicator of activity in the sector.

 

Permits filed in February also were nearly 29% below the 2.15m building permits registered in February 2006.

 

	Feb ‘07	Jan ‘07	Jan-Feb ‘07	Feb ‘06	Feb ’06 to Feb ‘07
US Housing Starts	1.525m*	1.399m*	9%	2.132m*	-28.5%

* Seasonally adjusted & annualised

By: Joe Kamalick
+1 713 525 2653

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