US new home building rises in Sept, strong in single-family

19 October 2010 14:42  [Source: ICIS news]

WASHINGTON (ICIS)--US new home building activity rose by 0.3% in September from August, the Department of Commerce said on Tuesday, but that marginal overall advance was driven by a strong 4.4% gain in the core category of single-family residential construction.

In its monthly report on new home building activity, the department said that housing starts in September were at a seasonally adjusted annual rate of 610,000 units, a narrow advance of 0.3% from the upwardly revised August figure of 608,000.

September’s pace of housing construction also was 4.1% ahead of the same month last year.

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

The American Chemistry Council (ACC) estimates that each new home built represents some $16,000 (€11,360) worth of chemicals and derivatives used in the structure or in production of component materials.

Within the overall data on new residential construction activity in September, housing starts for single-family homes rose by 4.4% from August to 452,000 while work on multi-unit apartment buildings declined by nearly 7%.

September's advance in single-family home construction followed a similar 4.3% gain in that category in August and marks the second consecutive month of improvements after many months of declines.

Single-family home construction is considered the core of the US housing industry, so changes in that crucial category provide a better sense of the sector’s health.

In addition, the department’s data indicate that there may be continued growth in single-family home building.

The housing report said that the number of building permits for new single-family homes issued in September rose by 0.5% from August to 405,000.

The overall figure for permits issued last month for all types of new residential construction was down by 5.6% compared with August, but that was due to a sharp 26% drop in permits for multi-unit apartment buildings.

Building permits are issued by local governments when contractors are ready to break ground and begin construction of a residential structure, so monthly permitting data are seen as a real-time indicator of the housing sector’s near-term prospects.

US Housing Starts

	Sep ’10	Aug ’10	Aug-Sep ’10	Sep ’09	Sep ’09 to Sep ’10
US Housing Starts	610,000*	608,000	0.3%	586,000	4.1%

* Seasonally adjusted & annualised

($1 = €0.71)

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