WASHINGTON (ICIS)--The US housing recovery is continuing and 2014 should see continued new home construction growth, industry officials said on Friday, arguing that a downturn in December housing starts data is neither critical nor a trend.
In a Commerce Department report issued earlier on Friday, US new home construction was seen to fall sharply in December from November, plummeting by nearly 10% across the board with significant declines in both single-family and multi-unit residential work.
The department said that housing starts last month were at a seasonally adjusted annual pace of 999,000, a decline of 9.8% from the November rate of 1.1m.
Within the overall housing construction figures for December, work on new single-family homes - the core market in the industry - declined by 7% to 667,000 units from the 717,000 new residences started in November.
Industry officials concede that the December drop-off appears precipitous, but they argue that the decline must be considered against an unusual 23% jump in housing starts seen in November.
“Total housing starts of just under 1m units in December was the third-highest monthly level of production in 2013,” said Rick Judson, chairman of the National Association of Home Builders (NAHB).
That rate, said Judson, “tells us that we are seeing a return to trend after a strong November”.
And despite the 7% decline last month in new construction on single-family homes, NAHB chief economist David Crowe noted that the seasonally adjusted annual rate of 667,000 new one-family housing starts in December “was the highest monthly total for single-family starts in 2013”, excepting only the 717,000 units begun in November.
Taking 2013 as a whole, Crowe said, “Last year was a good year for home building, with overall production up 18% from 2012”.
“As pent-up demand is unlocked and the labour market improves, we anticipate that 2014 should be an even better year for home construction,” he said.
NAHB economic and housing policy analyst Robert Dietz also pointed out that the number of job openings in construction trades in November last year was the highest since April 2007.
That level of construction job openings suggests that builders are seeking more workers in anticipation of further building expansion.
The recent bump in unfilled construction job openings “is consistent with the increase in construction sector activity, particularly for home building”, Dietz said.
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.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy