Be careful in analyzing this data set with a microscope as the potential error ranges and backward revisions are significant. Also the nature of this industry variations from month to month so the rolling averages are the best way to view this series – and the data remains in the range we have seen over the last 3 years. There are no warning signs except the rate of growth of building permits is decelerating.
The unadjusted rate of annual growth for building permits in the last 12 months has been around 10% – it is a +6.7 % this month.
Construction completions are lower than permits this month for the 13th month in a row (when permits exceed completions – this sector is growing)..
Unadjusted 3 month rolling averages for permits (comparing the current averages to the averages one year ago) is 14.8 % (permits) and 9.8 % (construction completions):
The 2015 rate of growth of this sector was equal to pre-recession levels.
3 month Rolling Average for Year-over-Year Growth Unadjusted Data
| |
Building Permits |
Construction Completions |
| Current Movement |
deceleration |
accelerating |
Unadjusted 3 Month Rolling Average of Year-over-Year Growth – Building Permit (blue line) and Construction Completions (red line)
Econintersect Analysis:
Building permits growth accelerated 1.1 % month-over-month, and is up 8.1 % year-over-year.
Single family building permits grew 21.1 % year-over-year.
Construction completions accelerated 3.6 % month-over-month, up 19.9 % year-over-year.
US Census Headlines:
building permits down 3.1 % month-over-month, up 6.3 % year-over-year
construction completions down 4.2 % month-over-month, up 17.5 % year-over-year.
the market expected (from Bloomberg):
| Annual Rates |
Consensus Range |
Consensus |
Actual |
| Housing Starts |
1.110 M to 1.177 M |
1.146 M |
1.178 M |
| Housing Permits |
1.150 M to 1.225 M |
1.202 M |
1.167 M |
Note that Econintersect analysis herein is based on UNADJUSTED data – not the headline seasonally adjusted data.
When more building permits are issued than residences completed – the industry is expanding – and this expansion was underway for three years (except for the last two months in 2014). In the graph below, any value above zero shows more permits are being issued than completions.
