US housing starts fall by 1.5% in July, with single-family down 5%

16 August 2011 15:25  [Source: ICIS news]

WASHINGTON (ICIS)--US new home construction fell by 1.5% in July compared with June, the Department of Commerce said on Tuesday, including a fall of nearly 5% in the core market for single-family houses.

In its monthly report, the department said there were approximately 604,000 privately owned housing starts in July, on a seasonally adjusted annual basis, compared with the revised downward June figure of 613,000.

The department had initially put June housing starts at 629,000, a significant 14.6% rise from May and a strong 9.4% advance for single-family home construction.

But July’s figures appear to quash hopes that the increase in June might continue.

In the core single-family housing sector, the department said that housing starts fell by 4.9% last month to 425,000, offsetting more than half of June’s gains.

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

The American Chemistry Council estimates that each new home built represents $16,000 (€11,200) worth of chemicals and derivatives used in the structure or the production of component materials.

The department’s data on the short-term future for residential construction also showed a downturn in July, with building permits falling by 3.2% from June to 597,000.

Building permits are issued by local governments when contractors are ready to begin construction of a residential structure, so monthly permits data are seen as a realtime indicator of the housing sector’s short-term prospects.

Last month’s decline in building permits reflects a renewed sense of pessimism among US housing contractors, who, in a survey on Monday, said they see little prospect for improved sales in the next six months.

Although down from June, both housing starts and building permits in July showed solid year-on-year improvement.

July’s housing starts were 9.8% above the same month in 2010, and building permits were 3.8% higher than July last year.

US Housing Starts

July ’11

June ’11

June-July ’11

July ’10

July ’10 to July ’11

US Housing Starts






* Seasonally adjusted and annualised

($1 = €0.70)

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