There's no question the 15% increase in September housing starts was the best economic news that sector of the construction market has heard in quite some time. According to the U.S. Census Bureau, privately-owned housing starts in September were at a seasonally adjusted annual rate of 872,000.
Along with being 15% above the revised August estimate of 758,000, this figure was 34.8% above the Sept. 2011 rate of 647,000. Single-family housing starts were at a rate of 603,000, 11% above the revised August figure of 543,000. The September rate for buildings with five units or more was 260,000, 25% above August.
Alas, as with many recent economic statistics, the boost in September housing starts may have looked good, but according to Karl Case, a professor of economics emeritus at Wellesley College and a recent speaker at the McGraw-Hill Construction Outlook, it was the first time total housing starts cracked the 800,000-start level in 48 quarters. At the conference Case said that while housing is trending in the right direction, it still has a long ways to go — the 800,000-level marks the 50-year floor in housing starts.
On the bright side, the news was also pretty solid with building permits in September, too. Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 894,000, 11.6% above the revised August rate of 801,000 and 45.1% above the Sept. 2011 estimate of 616,000. Single-family authorizations in September hit 545,000, 6.7% above the revised August figure of 511,000.
Most construction economists now expect housing to show consistently good growth over the next few years.
New Construction Put-in-Place ($ billions, SAAR)
Employment Wage & Price Statistics
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.