Housing Starts Surge in December

Amongst all the economic indicators that can help you monitor the health of the electrical market, the increase in housing starts stuck out the most over the past month.

In its analysis of the most recent housing data, the National Association of Home Builders (NAHB), Washington, D.C., said in a press release, “Solid gains in both single-family and multi-family housing production resulted in nationwide housing starts rising 12.1% percent to a seasonally adjusted annual rate of 954,000 units in December, according to newly released data from the U.S. Commerce Department. This is the highest level of new home production since June of 2008.”

“Builders have become increasingly optimistic about conditions in local housing markets in recent months and this report underscores that the housing recovery is well on its way,” Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla, said in that release. “With inventories of new homes at razor-thin levels, builders are moving prudently to break ground on new construction ahead of the spring buying season to meet increasing demand.”

“Overall, this report represents a solid ending to 2012 and a promising start to 2013,” added NAHB senior economist Robert Denk. “Multi-family production is almost back to normal levels and while single-family starts still have a way to go, they are gaining momentum. This trend could be even stronger if not for persistently tight credit conditions for home buyers, flawed appraisal values and uncertainties regarding economic policy debates in Washington.”

The December flurry of activity pushed housing to a strong finish for 2012. An estimated 780,000 housing units were started in 2012, 28.1% above the 2011 figure of 608,800.

Vital Statistics

CONSTRUCTION
New Construction Put-in-Place ($ billions, SAAR) Nov '12₁ Oct '12₂ Mo. % Change Nov '11 YTY % Change Total Construction 866.0 868.2 -0.3 804.0 7.7 Total Private Construction 589.8 590.8 -0.2 520.4 13.3 Residential 295.3 294.2 0.4 248.2 19 New single family 143.3 141.4 1.3 110.8 29.4 New multi-family 23.9 23.8 0.5 16.4 45.9 Lodging 11.0 11.1 -1.3 8.7 25.9 Office 26.3 26.5 -0.9 22.6 16.5 Commercial 44.8 45.1 -0.8 41.9 6.8 Health care 28.4 28.5 -0.3 29.5 -3.7 Educational 17.0 17.3 -1.6 15.6 9.1 Religious 3.5 3.7 -5.4 3.9 -9.9 Amusement and recreation 6.9 7.0 -1.3 7.4 -6.7 Transportation 12.4 11.9 3.4 10.6 16.2 Communication 17.0 16.5 2.8 16.3 4.2 Power 78.5 79.6 -1.4 69.1 13.6 Electric 64.5 66.1 -2.5 57.5 12.1 Manufacturing 47.2 47.7 -1 44.9 5.1 Public construction ($ billions) 276.2 277.4 -0.4 283.6 -2.6 Residential 6.6 6.5 1.5 7.6 -14.2 Office 9.4 10.0 -5.7 12.2 -22.6 Commercial 3.3 3.0 8.6 3.6 -7.5 Health care 11.4 11.5 -0.9 10.6 8.1 Educational 66.8 66.8 0.1 69.2 -3.4 Public safety 9.7 9.9 -2.6 10.3 -6.2 Amusement and recreation 8.7 9.6 -8.9 9.2 -4.7 Transportation 29.5 29.3 0.4 23.5 25.6 Power 11.8 11.3 4.3 10.5 11.9 Highway and street 77.8 77.4 0.5 82.8 -6 Sewage and waste disposal 21.8 21.4 1.6 22.2 -1.8 Water supply 12.6 12.9 -2.7 13.7 -8.2 Conservation and development 5.4 6.3 -13.8 6.5 -16.6 Housing starts (SAAR) Dec '12₁ Nov '12₂ Mo. % Change Dec '11 YTY % Change Total (millions of units) 954 889 12.1 697 36.9% Single-family (millions of units) 616 589 8.1 520 18.5% Multi-family (thousands) 330 281 23.1 153 115.7% EMPLOYMENT WAGE & PRICE STATISTICS Mo. Latest Month Mo. % Change Year ago YTY % Change Employment, Electrical Contractors (thousands) NOV 732 -1.4 724.1 1.1 Hourly wage, Electrical Contractors ($) NOV 27.35 1.5 25.85 5.8 Copper prices (cents per pound) JAN 369.75 0.9 370.87 -0.3 INDUSTRIAL MARKET Mo. Latest Month Mo. % Change Year ago YTY % Change Electrical Mfrs' Shipments ($ billions) OCT 2,970 -1.1 3,029 -1.9 Electrical Mfrs' Inventories ($ billions SA) OCT 4,593 0.5 4,549 1.0 Electrical Mfrs' Inventory-to-Shipments ratio OCT 1,546 1.5 1502 3.0 Electrical Mfrs' New Orders ($ billions SA) OCT 3,054 7.4 3,112 -1.9 Machine Tool Orders ($ millions) NOV 348.82 -18.6 402.94 -13.4 Industrial Capacity Utilization (percent, SA) DEC 78.05 0.5 pts. 77.24 0.8 pts. Purchasing Managers Index (percent) DEC 50.7 1.2 pts. 53.9 3.2 pts.

Footnotes: 1 - preliminary; 2 - revised; 3 - includes residential improvements; Z - less than 0.005 percent; SA - seasonally adjusted; SAAR - seasonally adjusted annual rate. Sources: Construction Put-in-Place statistics - Department of Commerce; Housing starts - Department of Commerce's Census Bureau; Electrical contractor employment numbers and hourly wage - Department of Labor; Copper prices - Metals Week; Electrical manufacturers' shipment data - Department of Commerce; Machine Tool Orders - Association for Manufacturing Technology; Industrial Capacity Utilization - Federal Reserve Board; and Purchasing Managers Index - Institute for Supply Management.

Note: Additional economic data relevant to the electrical industry is available on a bi-weekly basis by subscribing to Electrical Marketing newsletter. For subscription information see www.electricalmarketing.com.