US new home construction falls 9.9% in June from May

17 July 2013 15:07  [Source: ICIS news]

WASHINGTON (ICIS)--The US housing  recovery stumbled in June, with new home construction dropping by a sharp 9.9% from May, the Commerce Department said on Wednesday, including a nearly 27% plummet in apartment building work.

In its monthly report, the department also said that construction of new single-family homes - considered the core of the housing industry - was down by 0.8% in June.

The department said that housing starts in June were at a seasonally adjusted annual pace of 836,000 units, 9.9% below the upwardly revised May figure of 928,000. May’s home building pace originally had been put at 914,000.

The lion’s share of the June decline was laid to the sharp drop-off in work on apartment buildings having five or more units. 

Work was begun on 236,000 apartment buildings last month, down by 26.7% from the 322,000 pace seen in May.

Single-family housing starts in June were at 591,000, down 0.8% from the May pace of 596,000.

The 9.9% decline in overall housing construction for June more than offset the 7% gain reported for May.

The report also indicated that the on-and-off housing recovery might be in for another troubling month when the data for July are available in mid-August.

July could be a rough month for new home construction because the number of residential building permits issued in June fell by 7.5% from the May level, down to a seasonally adjusted annual pace of 911,000.

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 an indicator of the housing sector’s near-term prospects.

On the plus side, the department noted that despite the new downturns in home construction, the housing sector is doing significantly better than a year ago.

June’s housing starts were 10.4% ahead of the same month last year, and building permits issued last month were at a pace 16.1% higher than June 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 and synthetic fibres, among many others.

The American Chemistry Council (ACC) estimates that each new home built represents some $15,000 (€11,400) worth of chemicals and derivatives used in the structure or in production of component materials.

US Housing Starts

 

June ’13

May ’13

May-June ’13

June ’12

June ’12 to  June ’13

US Housing Starts

836,000*

928,000

-9.9%

757,000

10.4%

* Seasonally adjusted & annualised

($1 = €0.76)

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


By: Joe Kamalick
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