18 September 2013 17:29 [Source: ICIS news]
WASHINGTON (ICIS)--US housing construction grew by 0.9% in August from July, the Commerce Department said on Wednesday, including a strong 7% jump in the core market for single-family homes.
In its monthly report, the department said that housing starts last month were at a seasonally adjusted annual pace of 891,000, a gain of 0.9% from the downwardly revised July figure of 883,000.
July’s housing construction performance had initially been estimated at 896,000 units.
The August housing starts report is noteworthy in that it reverses a months-long trend in which construction of multi-family apartment buildings was generally improving while the critical core market for single-family homes remained weak and in some months actually fell.
But the department said that last month new construction of one-family homes shot up by 7% from July to a seasonally adjusted annual pace of 628,000. The August single-family construction pace also was nearly 17% ahead of the same month in 2012.
The strong gain in single-family housing starts more than offset the sharp drop in apartment building projects, which were down by 9.4% from July’s pace.
Despite that decline, the rate of multi-family housing construction is still running some 23% ahead of the year-ago pace.
Looking forward, the department said that the number of building permits issued in August was at a seasonally adjusted annual rate of 918,000, marking a 3.8% decline from the July pace.
Here too, however, the fall-off in building permits was laid wholly to a 15.7% drop in contractors’ plans for multi-unit apartment buildings, while permits issued for single-family homes showed a comfortable 3% gain.
This suggests that when the September housing starts data comes available on 17 October, this month likely will show another good advance for the core single-family home building sector.
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
Aug ’12 to Aug ’13
US Housing Starts
* Seasonally adjusted & annualised
($1 = €0.75)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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