The headline residential building permits improved and construction completions improved. Our analysis agrees.

 

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 growing, and completions also growing.

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% – it is +9.6 % this month.

Construction completions are LOWER than permits – which indicates growth.

Unadjusted 3-month rolling averages for permits (comparing the current averages to the averages one year ago) is +7.6 % (permits) and +15.8 % (construction completions):

3 month Rolling Average for Year-over-Year Growth Unadjusted Data

  Building Permits Construction Completions Current Movement decelerating decelerating

 

Econintersect Analysis:

Building permits growth accelerated 4.7 % month-over-month, and is up 9.6 % year-over-year.

Single family building permits is up 6.6 % year-over-year.

Construction completions decelerated 4.5 % month-over-month, up 9.0 % year-over-year.

US Census Headlines:

building permits up 7.4 % month-over-month, up 5.1 % year-over-year

construction completions up 5.2 % month-over-month, up 8.1 % year-over-year.

the market expected (from Bloomberg / Econoday):

Annual Rates Consensus Range Consensus Actual Housing Starts 1.120 M to 1.201 M 1.270 M 1.215 M Housing Permits 1.240 M to 1.260 M 1.206 M 1.254 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.