July US home building up by 5.9%, but one-family housing falls

16 August 2013 14:36  [Source: ICIS news]

WASHINGTON (ICIS)--US new home construction grew by nearly 6% in July from June, the Commerce Department said on Friday, but the gain was solely in apartment building projects while the core single-family market fell just over 2%.

In its monthly report, the department said that housing starts in July were at a seasonally adjusted annual pace of 896,000, an increase of 5.9% from the upwardly revised June figure of 846,000.

The June housing starts figure originally had been estimated as 836,000.

While the 5.9% gain in July marks a welcome turnabout from the almost 10% plummet in housing construction reported for June, last month’s home construction data is not good news for the core market of single-family homes.

The department said that construction of multi-unit apartment buildings rose by 25.5% in July from June, but work on one-family homes fell during the month by 2.2%.

However, while the nearly year-old housing recovery remains wobbly, the home construction sector is still running well ahead of last year. 

July’s overall housing starts are nearly 21% ahead of July 2012, including a 15.4% gain for single-family construction and a 33.6% advance for apartment buildings.

The report also said that the number of building permits issued in July rose overall by 2.7% to a seasonally adjusted annual pace of 943,000 from the downwardly revised June figure of 918,000, which was originally put at 919,000.

But here too, the news for the single-family housing market is not good.

The number of building permits issued for construction of multi-unit apartment buildings rose by 13.5% in July, but authorisations for work on single-family homes fell by 1.9%.

This suggests that work on single-family homes this month might show another poor performance when the August data are available on 18 September.

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.

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 (€11,250) worth of chemicals and derivatives used in the structure or in production of component materials.

US Housing Starts

 

July ’13

June ’13

July-June ’13

July ’12

July ’12 to    July ’13

US Housing Starts

896,000*

846,000*

5.9%

741,000*

20.9%

* Seasonally adjusted & annualised

($1 = €0.75)

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


By: Joe Kamalick
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