Economy Watch: Housing Starts Drop in November
- Dec 20, 2012
Private housing starts in November came in at an annualized rate of 861,000 units, according to the Census Bureau on Wednesday. That’s 3 percent below the revised October estimate of 888,000, and adjusted for the fact that colder weather slows down housing construction. Still, the latest estimate is 21.6 percent above the November 2011 annualized rate of 708,000.
Single-family housing starts in November 2012 were at an annualized rate of 565,000, which is 4.1 percent below the revised October figure, but more than 20 percent higher than during the same month in 2011. The November 2012 rate for buildings with five apartments or more, which tends to swing around more than single-family new construction rates, was 285,000 units.
Residential building permits, a forward-looking indicator in the new housing market, saw a 3.6 percent monthly gain in November to an annualized rate of 899,000 units. On a year-over-year basis, permits were up significantly as well, at 26.8 percent higher than the November 2011 rate of 709,000 units.
AIA says architectural billings up
The American Institute of Architects reported on Wednesday that billings at architecture firms across the country are continuing to increase. The AIA said that its Architecture Billings Index score was 53.2 in November, up from 52.8 in October.
This score reflects an increase in demand for design services, with any score above 50 indicating more billings. The new projects inquiry index was 59.6 in November, also up slightly from the 59.4 mark of the previous month. As a leading economic indicator of construction activity, the index reflects the roughly nine- to 12-month lag between architecture billings and construction spending.
“These are the strongest business conditions we have seen since the end of 2007, before the construction market collapse,” AIA chief economist Kermit Baker noted in a press statement. “The real question now is if the federal budget situation gets cleared up which will likely lead to the green lighting of numerous projects currently on hold. If we do end up going off the ‘fiscal cliff’ then we can expect a significant setback for the entire design and construction industry.”
Government to sell GM stake
The U.S. Department of the Treasury said on Wednesday that it’s planning to sell off the federal government’s remaining shares of General Motors Co., which is currently a 32 percent stake. The exit will be within 15 months, winding down a $49.5 billion bailout effort for the automaker began by the Bush administration in the darkest days of the Panic of 2008 and continued by Obama administration. Last week, the government started selling its stake in insurance giant AIG, another ultimately successful bailout widely reviled at its inception.
Wall Street seemed nervous on Wednesday, perhaps worried that the economy would indeed go Thelma and Louise despite this week’s happy chatter about the fiscal cliff. The Dow Jones Industrial Average lost 98.99 points, or 0.74 percent, while the S&P 500 was down 0.76 percent and the Nasdaq dropped 0.33 percent.