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Monthly Construction Economics Report
Sector Still Strong Despite Some Setbacks


Housing Starts Single-family starts rose 1.6 percent in August as the three-month moving average hit a post-recession high. Also, through the first eight months of 2017, single-family starts are trending 8.9 percent above last year's pace. However, multifamily starts were down 6.5 percent for the month, which caused an overall drop in starts of 0.8 percent. Wells Fargo Economics Group said most of the loss was in starts for apartments that "have seen a great deal of supply come on the market in many parts of the country."


Housing Permits Multifamily permits shot up 19.7 percent in August and over the last three months are 32.8 percent ahead of multi-family starts, which gives hope to a coming jump in those starts. And the latest figures show that single-family permits have tallied nearly an 11 percent gain year-to-date.


Commercial Construction Sector Remains Upbeat The Q3 USG Corporation + U.S. Chamber of Commerce Commercial Construction Index found that 95 percent of the contractors surveyed expect revenues to grow or stay stable over the next 12 months, and 93 percent anticipate that profit margins will increase or stay the same over that time period.


Leading Economic Index For the 12th consecutive month, this index, which is meant to predict economic activity, rose 0.4 percent signaling modest future growth according to the Wells Fargo Economics Group. Seven of the eight components measured showed gains over last month with building permits leading the way.


Total Construction Starts Dodge Data & Analytics reported that nonresidential building starts was a big winner in August, jumping 14 percent, but overall construction starts slid 2 percent from July. Year-to-date, total construction starts would be up 2 percent from 2016 if not for the 39 percent drop in the electric utility/gas plant category.


Architecture Building Index The ABI, an indicator of the 9- to 12-month lead time between billings for design work and construction spending, gained almost two points from the following month. The score, 53.7, up from 51.9, was the seventh consecutive month of growth in the index. New project inquiries performed even better, posting a reading of 62.5: a full three points above last month's score.


Homebuilder Confidence The NAHB/Wells Fargo Housing Market Index fell 3 points in September, which to the authors of the index may signal some slowing in new home sales and homebuilding for the rest of the year. Hurricanes Harvey and Irma were handed some of the blame as they inflicted damage on the two largest states for new single-family homes, Texas and Florida.

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May 27, 2018, 10:23 am PDT

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Last Updated 05-24-18
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