The U.S. Census Bureau and the U.S. Department of Housing and Urban Development announced new residential construction statistics for August 2019.
Privately‐owned housing starts in August were at a seasonally adjusted annual rate of 1,364,000. This is 12.3 percent (±10.2 percent) above the revised July estimate of 1,215,000 and is 6.6 percent (±11.6 percent) above the August 2018 rate of 1,279,000.
Single‐family housing starts in August were at a rate of 919,000. This is 4.4 percent (±10.3 percent) above the revised July figure of 880,000. The August rate for units in buildings with five units or more was 424,000.
“The single family market looks good for the past four months, peaking in July 2019, after a slump from November to March during the cold weather season,” commented Gene Wengert, the Wood Dr.
Wengert also said that multi-unit starts (mainly five and more units) have had growth in the past year (August 2018 to August 2019), with a slump December through March, peaking in May.
Wengert said that another piece of data that the Commerce Department provides is what has happened from January to August in 2018 (615,000 single family starts) versus January to August 2019 (598,000 starts) That’s a 3 percent drop this year. Multi-unit starts are 253,000 for both years.
“What does this mean? First, for flooring and cabinets as well as flooring, trim and other forest products, we can expect fluctuations in demand throughout the year with a winter-spring slowdown,” he said.
“Second, any one month’s data can show jumps or declines, but may not reflect the overall picture. Third, the South is where things are happening, so perhaps it is prudent to consider products that will serve this warm region, at least be very active in marketing there.
“Fourth, many experts use the housing market as an indicator of the hearth of the economy. So, do these numbers indicate that investments in manufacturing still look positive? Perhaps you can find other trends that provide guidance.
“A final comment. The remodeling market is roughly equal to the new housing market for wood products.”
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