March 2017 Residential Building Improves -

March 2017 Residential Building Improves

Apr 18, 2017Jeremy ParkinsonFinance0

The headline residential building permits improved. Our analysis agrees.

Analyst Opinion of Residential Building

The backward revisions this month were slight.The nature of this industry normally has large variations from month to month so the rolling averages are the best way to view this series – and it shows permits growing, and completions also growing. The strength this month is single family permits.

Looking at residential construction employment, the year-over-year growth of employment is now slightly above the growth of housing starts.

The unadjusted rate of annual growth for building permits in the last 12 months has been around 10% – it is +14.5 % this month.

Construction completions are LOWER than permits – which indicates growth.

Unadjusted 3 month rolling averages for permits (comparing the current averages to the averages one year ago) is +10.5 % (permits) and +10.4 % (construction completions):

3 month Rolling Average for Year-over-Year Growth Unadjusted Data

Building Permits Construction Completions Current Movement accelerating accelerating

Econintersect Analysis:

Building permits growth decelerated 16.7 % month-over-month and is up 0.0 % year-over-year.

Single-family building permits is up 9.1 % year-over-year.

Construction completions accelerated 4.5 % month-over-month, up 4.5 % year-over-year.

US Census Headlines:

building permits up 3.6 % month-over-month, up 17.0 % year-over-year

construction completions up 3.2 % month-over-month, up 13.4 % year-over-year.

the market expected (from Bloomberg / Econoday):

Annual Rates Consensus Range Consensus Actual Housing Starts 1.185 M to 1.285 M 1.262 M 1.215 M Housing Permits 1.230 M to 1.260 M 1.250 M 1.260 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.