New US house building has stalled

Housing construction in the US fell to its second lowest level on record in March, official figures have shown.

Construction of new houses and apartments fell 10.8% last month to an annual rate of 510,000 units, the US Commerce Department said.

Applications for building permits, which signal future activity, dropped 9% from February.

Separate government data showed that claims for unemployment benefits fell by 53,000 in the week ended 11 April.

The Labor Department said the number of claims declined from 663,000 the week before to 610,000.

'Mixed news'

The construction data is a stark reminder that the housing slump is far from over.
“ The decline of 10.8% is much weaker than expected and is obviously a disappointment ”
Hugh Johnson, Johnson Illington Advisors

The decline in new starts in March was worse than economists had expected, and followed a 17.2% rise in February.

February's gain had been driven by an increase in apartment activity, which can be a volatile sector.

The March rate was the second lowest since the Commerce Department started keeping records in 1959.

The lowest came in January when the annual rate dropped to 488,000.

Starts were down 54.1% from March 2008 while permits were down 49.5% year-on-year.

"The news is very mixed," said Hugh Johnson, chief investment officer at Johnson Illington Advisors in New York.

"Both the housing numbers and the jobless claims numbers are very volatile.

"The bad news obviously is that housing remains extremely weak. The decline of 10.8% is much weaker than expected and is obviously a disappointment.

"If there is a bright light in the news, it's the decline in jobless claims. Jobless claims are important because they are a leading indicator of employment."

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8002904.stm

Published: 2009/04/16 15:35:53 GMT