US housing starts at 25% of 2006 peak

Housing jan10.JPGUS housing is still limping along the bottom. December’s housing starts were only 0.2% above 2008 levels. Overall, 2009 saw just 554k starts, the lowest level for 50 years, despite the support of the $8k tax credit.

During the Boom period, as the ACC’s chart above shows, starts (blue line) peaked at a 2.2 million rate. This was worth $35bn in terms of total chemical sales, with each house using $16k of products (in 2009 money). The current figures imply a market of c$9bn.

On the positive side, building permits (red line) rose 16% in December versus 2008. This is hopefully a leading indicator that some confidence is returning to the market. But a full recovery to the 2006 peak would require a 400% increase from today’s levels. The blog would not bet its own money on this happening any time soon.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.


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