US home building falls to 17-year low in March

16 April 2008 15:19  [Source: ICIS news]

US home building slumpsWASHINGTON (ICIS news)--US new home construction slumped to a 17-year low in March, falling nearly 12% from February to a seasonally adjusted annual rate of 947,000 housing starts, the Commerce Department said on Wednesday.

 

The fall was twice as much as forecast and suggested the slowdown in the construction industry will continue to eat away at US economic growth.

 

The department’s data also indicated further declines were yet to come, showing that building permits for privately owned housing units filed in March were down nearly 6% from February at 927,000.

 

The level of new home construction last month also was 36.5% below the sector’s activity in March 2007 when work was begun on 1.49m housing units. 

 

The March figures mark the first time since the 1990s the annualised monthly data for new home construction has fallen below 1m units, the level many economists had considered the new “floor” for US home building activity.

 

March building permits were fully 41% below the 1.57m construction authorisations that were issued in the same month of 2007.

 

Building permits, which are issued by local governments when housing contractors are to begin building a residence, are seen as an accurate barometer of the home construction sector’s near-term prospects.

 

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.

 

The sharp decline in home building statistics comes a day after the National Association of Home Builders (NAHB) revised its housing forecast, saying the slump in home construction was likely to continue through the rest of this year with no bottom in sight before 2009.

 

Earlier the home builders' group had forecast the housing slump to bottom out in the third quarter of this year and begin a recovery.

 

US housing starts, March 2008

 

 

Mar ‘08

Feb ‘08

Feb-Mar ‘08

Mar ‘07

Mar ’07 to Mar ‘08

US Housing Starts

 

947,000*

1.07m*

-11.9%

1.49m*

-36.5%

* Seasonally adjusted & annualised


By: Joe Kamalick
+1 713 525 2653



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