US home construction falls 3% in November

19 December 2012 14:50  [Source: ICIS news]

WASHINGTON (ICIS)--US new home construction fell by 3% in November from October, the Commerce Department said on Wednesday, with the key single-family sector falling by just more than 4%.

In its monthly report on housing construction, the department said that housing starts last month were at a seasonally adjusted annual rate of 861,000, off by 3% from the downwardly revised October figure of 888,000.

October’s housing starts had initially been put at 894,000 units.

In addition, the downturn in new home construction was focused in the critical single-family sector, considered the core of the residential building market.

The department said that new construction of one-family homes fell by 4.1% last month, a decline that offset a 1.4% growth in work on multi-family apartment buildings.

The decline in new home construction for November suggests that the long-awaited housing sector recovery is still sporadic.

However, the department noted that November’s housing construction activity was 21.6% ahead of the same month in 2011, with single-family home building nearly 23% above November 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 $15,000 (€11,400) worth of chemicals and derivatives used in the structure or in production of component materials.

The department’s report also suggests that activity in that key single-family housing sector might see another poor month when December’s data is available.

The department said that building permits for single-family housing fell by 0.2% in November, an indication that contractors do not see sufficient near-term demand.

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

 

Nov ’12

Oct ’12

Oct-Nov

Nov ’11

Nov ’11 to Nov ’12

US Housing Starts

861,000*

888,000*

-3%

708,000*

21.6%

* Seasonally adjusted & annualised

($1 = €0.76)

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


By: Joe Kamalick
+1 713 525 2653



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