US home building continues renewed decline in April

19 May 2009 14:29  [Source: ICIS news]

WASHINGTON (ICIS news)--US new home construction fell sharply again in April, the Commerce Department said on Tuesday, further dampening hopes of a housing recovery.

The department said that housing starts in April were at a seasonally adjusted annual rate of 458,000 units, a 12.8% decline from March and 54.2% below home building activity seen in April 2008 when work began on slightly more than 1m homes or apartments.

Housing starts recorded a significant 22% increase in February compared with January, giving rise to expectations that the crucial home construction sector might be making a recovery.

However, much of that bump in new residential construction was attributed to a rising demand for rental apartments due to the increasing number of families who have lost their homes to foreclosure.

February’s upturn in housing starts was quickly chilled when figures for March showed a renewed downturn with a 10.8% decline.

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 department said that building permits also fell in April, dropping by 3.3% from March to a seasonally adjusted annual rate of 494,000 units. That number was 50.2% below the level of permits authorised in April last year.

Building permits are issued by local governments when contractors are ready to begin work on a new residential structure, so they are seen as a reliable indicator of near-term prospects for the housing sector.

The renewed decline in housing starts and building permits comes despite growing confidence among home builders that the industry is about to bottom out and head for a recovery.

US housing starts


April ‘09

March ‘09

March-April ‘09

April ‘08

April ’08 to April ‘09

US housing starts

0.458m*

0.525m*

    -12.8%

 1m*

  -54.2%

* Seasonally adjusted & annualised

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By: Joe Kamalick
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