The headline residential building permits and construction completions showed monthly data down. It is obvious there is a slowing cycle going on in this sector.
Analyst Opinion of Residential Building
The backward revisions this month were moderate.The nature of this industry normally has large variations from month to month (mostly due to weather) so the rolling averages are the best way to view this series – and it shows permits rate of growth unchanged, and completions rate of growth declining. Looking at the rolling average graph in this post you can see the obvious softness in permits.
Looking at residential construction employment, the year-over-year growth of employment is almost correlating with housing starts.
- The unadjusted rate of annual growth for building permits in the last 12 months has been around 10% -Â it is +5.6 % this month.
- Unadjusted Construction completions are nearly the same as permits – which indicates a static sector.
- Unadjusted 3 month rolling averages for permits (comparing the current averages to the averages one year ago) is +7.4 % (permits) and +12.9 % (construction completions):
3 month Rolling Average for Year-over-Year Growth Unadjusted Data
| Â | Building Permits | Construction Completions |
| Current Movement | unchanged | decelerating |
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Econintersect Analysis:
- Unadjusted Building permits growth decelerated 6.2 % month-over-month, and is up 5.6 % year-over-year.
- Unadjusted Single family building permits is up 12.9 % year-over-year.
- Unadjusted Construction completions decelerated 6.0 % month-over-month, up 7.6 % year-over-year.
US Census Headlines:
- building permits down 4.1 % month-over-month, up 4.1 % year-over-year
- construction completions down 6.2 % month-over-month, up 8.2 % year-over-year.
- the market expected (from Bloomberg / Econoday):
| Annual Rates | Consensus Range | Consensus | Actual |
| Housing Starts | 1.120 M to 1.201 M | 1.225 M | 1.155 M |
| Housing Permits | 1.230 M to 1.270 M | 1.246 M | 1.223 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.
