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March 2014 Economic News03-13-14 | News

March 2014 Economic News

46 - The NAHB homebuilder confidence index plunged 10 points in February, driven downward by poor winter weather and an increasing shortage in skilled construction labor and available, ready-to-build lots. The index score of 46 is the first reading below 50 since May 2013; scores below 50 indicate more builders perceive conditions as poor than good.

12.3% - Construction employment jumped in January to the highest level since July 2009 with the largest monthly increase in nearly seven years, adding 48,000 jobs from December. The unemployment rate for construction workers looking for jobs declined from 16.1 percent in January 2013 to 12.3 percent, the lowest January rate since 2008. While the construction industry added 179,000 jobs from January 2013 through January 2014, total unemployed construction workers declined by 277,000 year-over-year, indicating that nearly 100,000 workers left the industry over the same span.

87 - The National Association of Homebuilders' Leading Markets Index (LMI) increased by one percentage point from January to February; based on current housing permits, prices and employment data, the national market is running at 87 percent of normal economic and housing activity. While two additional housing markets measured by the LMI reached or exceeded normal economic activity levels in February, just 58 areas out of 350 national metropolitan areas now meet that standard.

New Residential Construction, January

Residential construction activity declined across the board for the second consecutive month in January, as harsh weather conditions contributed to an industry-wide slowdown. Housing starts fell to their lowest pace since September and were 2.0 percent lower year-over-year. Building permits, a signifier of future growth, increased 2.4 percent year-over-year despite the decline from December.

888,000 - annual rate, new housing starts, seasonally adjusted (SA)
-15.9% - housing starts rate change since December 2013 (SA)
2.27 - housing starts annual rate peak (millions), January 2006
937,000 - annual rate, new building permits (SA)
-5.4% - building permits rate change since December 2013 (SA)
2.26 - building permits annual rate peak (millions), September 2005

Year-End Housing Affordability Remains Static

Housing affordability held steady in the fourth quarter of 2013 due to slightly lower median home prices and a small uptick in mortgage rates, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI). Homes sold between the beginning of October and end of December were affordable to 64.7 percent of families earning the U.S. median income of $64,400, effectively the same as the 64.5 percent affordability rate in the third quarter. The national median home price dipped from $211,000 in the third quarter to $205,000 in the fourth quarter, while average mortgage interest rates rose from 4.45 percent to 4.54 percent in the same period.

Construction Materials Prices End 2013 With a Slight Decline

The December Producer Price Index (PPI) for construction components and materials fell 0.1 percent on a seasonally adjusted basis after no change over the previous two months. Raw materials prices fell for the second consecutive month, as did cement prices; diesel fuel prices increased 7.9 percent, erasing declines in October and November, though prices remain 0.9 percent below December 2012 levels. The index was up 1.5 percent on a not seasonally adjusted (NSA) year-over-year basis and was 7.8 percent higher than in December 2010.
Credit: Bureau of Labor Statistics/Reed Construction Data.