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Economic Update
Housing Starts Up, Record Construction Backlog and More

Economic Update

New Home Sales and Inventories Improve
The 3.5% rise in new home sales month-to-month in the latest report boosted the year to date totals 6.9%. Inventories had a modest rise of 1.6%; the fifth consecutive monthly gain. In spite of this, the Wells Fargo Securities Economics Group blamed higher mortgage rates for not getting even better news but "solid job and income growth should keep sales trending higher."

Economic Update

Confidence Remains High on Many Fronts
Sales, profit margins and staffing levels, remain well above 50 in the just released report from The Associated Builders and Contractors "signaling ongoing expansion in construction activity." Consumer confidence hit its highest level since 2000 according to the Wells Fargo Securities Economics Group and builder confidence in the new single-family home sector remained strong though unchanged with a 67 reading in the latest index from the National Association of Home Builders.

Economic Update

Home Construction Numbers Up and Down
The most recent report from the U.S. Census Bureau showed that residential building permits were down 5.5% year-over-year, but housing starts were up 9.4% year-over-year and completions gained 11.2% over the same reporting period last year.

Economic Update

Construction Backlog Hits Record High
In the second quarter of this year, the Construction Backlog from the Associated Builders and Contractors was at 9.9 months, a record number for that reporting period, a 12.2% gain over the first quarter, and a 14% improvement from Q2 2017. The commercial/industrial sector was even higher at 10.11 months.

Economic Update

Construction Input Costs Up Year-to-Date
Not surprisingly, prices for goods and service used in the construction industry are higher today than this time last year. The Associated General Contractors of America put that 12-month gain at 6.2%, noting that "the cost increases come as many construction firms are already grappling with the impacts of labor shortages and the prospect of further tariffs on key materials."

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July 16, 2019, 6:24 pm PDT

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