US housing starts rise 0.8% in Feb, building permits up 4.6%

19 March 2013 13:44  [Source: ICIS news]

WASHINGTON (ICIS)--US new home construction rose by 0.8% in February from January, the Commerce Department said on Tuesday, and last month’s 4.6% growth in the number of building permits issued suggests continued housing recovery ahead.

In its monthly report, the department said that housing starts last month were at a seasonally adjusted annual rate of 917,000 units, a 0.8% gain over the upwardly revised January figure of 910,000.

The January housing starts figure had originally been estimated at 890,000.

Although the January to February gain was not large, the current pace of US residential construction activity is considerably ahead of year-ago figures. The department said that the February home building pace was nearly 28% higher than February 2012.

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 $15,000 (€11,550) worth of chemicals and derivatives used in the structure or in production of component materials.

The department also said that building permits issued last month totalled 946,000 (seasonally adjusted and annualised), a rise of 4.6% compared with the downwardly revised January pace of 904,000. The original January estimate had been 925,000 permits.

On a year-to-year basis, the growth of building permits in February was even faster than actual housing starts, with last month’s construction authorisations nearly 34% of the rate seen in February 2012.

However, the February advance in building permits was attributed in large part to a 7.5% growth in authorisations for multi-family apartment construction projects.

Permits growth in the critical single-family home category was more modest but still healthy at 2.7% compared with January’s pace.

Single-family homes account for the bulk of US residential construction activity, and they are the primary housing sector consumer of chemicals and resins.

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.

The February advance in housing starts and the sharp upturn in building permits for the month are in contrast to Monday’s report of declining confidence among residential construction contractors.

US Housing Starts

 

Feb ’13

Jan ’13

Jan - Feb ’13

Feb ’12

Feb ’12 to Feb ’13

US Housing Starts

917,00*

910,000*

0.8%

718,000*

27.7%

* Seasonally adjusted & annualised

($1 = €0.77)

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


By: Joe Kamalick
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