US new home construction jumps in June, including one-family units

18 July 2012 14:40  [Source: ICIS news]

WASHINGTON (ICIS)--US new home construction figures increased significantly in June, the Commerce Department said on Wednesday, with housing starts up by 6.9% from May, including a solid 4.7% improvement in the core market for single-family homes.

In its monthly report, the department said US housing starts in June were at a seasonally adjusted annual pace of 760,000 units, compared with the upwardly revised figure of 711,000 in May.

May’s housing starts had originally been estimated at 708,000.

The improvement in housing construction was evident in both single-family homes and in multi-unit apartment buildings.

While the advance in multi-unit construction was stronger at 17%, the 4.7% boost to single-family home construction improved on the 3.2% gain in single-family housing seen in May.

The overall June housing starts figures also mark a 23.6% increase from the same month in 2011.

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.

The American Chemistry Council (ACC) estimates that each new home built represents some $15,000 (€12,150) in chemicals and derivatives used in the structure or in production of component materials.

However, the department’s data also suggest that the June gain in new home construction might be short-lived, as permits for housing work declined last month by 3.7% from May’s recorded figure.

The department said that 755,000 residential building permits were issued in June, down from the revised May rate of 784,000.

But the permits issued in June were still 19.3% ahead of the pace seen in the same month last year.

Building permits are issued by local governments when contractors are ready to start work on a home or apartment project, so they are seen as an accurate real-time indicator of the near-term prospects for the housing sector.

The second-month advance in single-family home construction comes amid other recent positive indicators for the housing market, including a 7.6% jump in May sales of new homes and rising confidence among contractors about the sector’s near-term prospects.

US Housing Starts


  June ’12

  May ’12

   May 2012       
  
to June 2012

  June ’11

   June 2011
   to June 2012

US Housing Starts

 760,000*

  711,000*

      6.9%

  615,000*

    23.6%

* Seasonally adjusted & annualised

($1 = €0.81)

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy


By: Joe Kamalick
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