17 June 2008 14:51 [Source: ICIS news]
The department also said that residential construction last month was 32% below the pace of home building in May last year when construction began on 1.44m units.
In April, housing starts had shown an unexpected 8.2% increase from March to 1m units, lending hope to some observers that the long slide in the crucial
However, May’s figures demonstrate that the market for new residential buildings has dipped still further. The home building industry has been in almost steady decline since late 2006. Housing starts reached a peak in 2005 at more than 2m units.
The housing sector is a key downstream consumer sector for the chemicals industry, with new construction 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 department’s construction data also indicated that the housing sector is facing still more bad news. Building permits issued in May were at a seasonally adjusted annual rate of 969,000, down 1.3% compared with April and more than 36% below the 1.5m permits issued in May 2007.
Building permits are issued by local governments when contractors are ready to begin construction of dwellings, so they are seen as a real-time indicator of near term prospects for the home building industry.
US Housing Starts
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May ‘07 to May ‘08
US Housing Starts
* Seasonally adjusted & annualised
($1 = €0.65)
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