The April new construction numbers are in, for the national construction business, and on a year over year some positive trends no doubt, also the trends movement from the bottom are positive, but you have a nagging feeling that all is not well in the construction business. When permits, starts and sales are off between 45 to 52% from the 50 year average, the industry as a whole still has some pretty serious challenges.
Since the peak year was back in 2005 and the time span is now seven years, as business picks up there will be challenges in finding knowledgeable capable works in all phases of the business, similar to what happened in the oil business when the price plummeted and stayed down so long. The major difference in the building business will be whether it can produce wages high enough to attract workers back in the field to generate enough production to meet demand or will a “shortage” of workers create a shortage of supply which them drives the price higher to allow wages that bring workers back into the field, because the wages offset the risk of being laid off when demand is satisfied.
Thoughts to ponder on the home construction ……………………………
| actual total for year | permit issued | start of construction | ||||||
| multi | single | multi | single | single sales | ||||
| 2012: | Year to Date | 227.6 | 151.2 | 218.5 | 151.4 | 104 | ||
| 2011: | Year to Date | 179.1 | 127.7 | 174.5 | 127.3 | 101 | ||
| year over year + or - | 27.08% | 18.40% | 25.21% | 18.93% | 2.97% |
| seasonally adjusted | ||||||
| permits issued | permits issued total | |||||
| one unit structure | includes multi family | |||||
| permits issued | 475 | 715 | ||||
| peak year | 1682 | 2219 | ||||
| permits % drop from peak | 72% | 68% | ||||
| 50 year average | 911 | 1383 | ||||
| permits % drop from 50 year | 48% | 48% | ||||
| movement up from Bottom | 353 | 35% | 522 | 37% | ||
| housing started | starts total | |||||
| one unit structure | includes multi family | |||||
| starts | 492 | 717 | ||||
| peak year | 1611 | 2357 | ||||
| starts % drop from peak | 69% | 70% | ||||
| 50 year average | 1056 | 1481 | ||||
| starts % drop from 50 year | 53% | 52% | ||||
| movement up from Bottom | 360 | 37% | 520 | 38% | ||
| housing sales | ||||||
| one unit structure | ||||||
| new single family sales | 343 | |||||
| peak year July 2005 | 1283 | |||||
| sales % drop from peak | 73% | |||||
| 48 year average from 1963 | 628 | |||||
| sales % drop from 48 year average | 45% | |||||
| Bottom August 2010 | ||||||
| movement up from Bottom | 278 | 23% |
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