US housing a long way from full recovery

US housing Mar10.pngUS housing used to be a $35bn chemicals market, with 2.2m housing starts in 2006, each with a $16.7k chemicals value.

Last year, total housing starts were just 550k, for a value of only $9bn. And as the chart above shows, from the American Chemistry Council, the annualised rate (blue line) was just 575k in February. Building permits (red), an indicator of future building activity, increased 11% to 612k.

The depth of the current downturn is shown by the fact that it would take a 35% increase from 2009’s level just to get back to the lowest level of housing starts seen between 1959-2008. Optimists argue that a major downturn leads to a strong recovery, but with 15% of Americans either in foreclosure, or at least one mortgage payment overdue, the blog fears this optimism is misplaced.

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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