US new home building rises nearly 7% in May on apartment work

18 June 2013 15:07  [Source: ICIS news]

US new home building rises nearly 7% in May on apartment workWASHINGTON (ICIS)--US new home construction rose by nearly 7% in May from April, the Commerce Department said on Tuesday, but the advance was almost entirely in apartment buildings while the core single-family home sector saw only minor improvement.

In its monthly report, the department said that housing starts in May were at a seasonally adjusted annual rate of 914,000, an increase of 6.8% from the upwardly revised April figure of 856,000.

The original April estimate was 853,000 housing starts.

New residential construction in May also was 28.6% ahead of activity in the same month of 2012.

However, the May improvement in new home construction was attributed almost wholly to a 24.9% jump in work on multi-family apartment buildings.

In contrast, there was only a 0.3% improvement in construction of new single-family homes, considered the core of the US housing sector.

But both single-family housing starts and the apartment building sector produced much better results than in April.  Last month saw a 2.1% drop in construction of single-family homes and a sharp 37.8% plummet in work on apartment buildings.

The department also reported that the number of building permits issued in May was down by 3.1% from April to a seasonally adjusted annual pace of 974,000.

While the number of building permits issued in May is nearly 21% ahead of May 2012, last month’s decline in construction authorisations suggests that residential building activity in June might show a downturn when the data is available in July.

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 is seen as a reliable indicator of the housing sector’s near-term prospects.

Despite the low pace of new housing construction, especially in the key single-family home sector, US home builders on Monday reported their highest level of market confidence since before the recession.

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 and synthetic fibres, among many others.

The American Chemistry Council (ACC) estimates that each new single-family home built represents some $15,000 (€11,201) worth of chemicals and derivatives used in the structure or in production of component materials.

US Housing Starts

 

May ’13

Apr ’13

Apr-May ’13

May ’12

May ’12 to May ’13

US Housing Starts

914,000*

856,000

6.8%

711,000

28.6%

* Seasonally adjusted & annualised

($1 = €0.75)


By: Joe Kamalick
+1 713 525 2653



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index