U.S. Housing Starts Firm During November

• Total starts increase to nine-month high.

• Single-family housing starts improve to highest level since April 2007.

• Building permits strengthen.

Home building remains notably robust, spurred by record low interest rates. Housing starts improved 1.2% (12.8% y/y) in November to 1.547 million (SAAR) from 1.528 million in October, revised from 1.530 million.. Despite the increase, starts remained 2.5% below their January peak of 1.617 million. The Action Economics Forecast Survey expected 1.530 million starts in November.

Starts of single-family homes edged 0.4% higher last month (27.1% y/y) to 1.186 million from 1.181 million in October, revised from 1.179 million. The latest level was roughly three-quarters above the April low. A 4.0% increase (-17.6% y/y) in multi-family starts to 361,000 from 347,000 in October, revised from 351,000, accompanied the rise. Multi-family starts have been near that level for five months, down 42.5% versus the peak this past January.

Building permits rose 6.2% (8.5% y/y) to 1.639 million in November from 1.544 million, revised from 1.545 during October. It was the highest level of permits since September 2006. Permits to build single-family homes rose 1.3% (22.2% y/y) to 1.143 million following six consecutive months of increase. Permits to build multi-family homes strengthened 19.2% (-13.7% y/y) to 496,000 after falling for three straight months.

By region, housing starts in the Northeast rebounded 58.8% (27.4% y/y) to 135,000 and recovered October's decline. In the West, starts improved 8.2% (15.3% y/y) to 407,000, the highest level since January. In the South, starts eased 6.0% (+9.0% y/y) to 809,000 following October's 14.3% rise. Housing starts in the Midwest fell 4.9% (+15.3% y/y) to 196,000 following declines in three of the prior four months.

The housing starts and permits figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.                                                                                                                                                                                                

Housing Starts (000s, SAAR)	Nov	Oct	Sep	Nov Y/Y %	2019	2018	2017
Total	1,547	1,528	1,437	12.8	1,295	1,248	1,207
Single-Family	1,186	1,181	1,097	27.1	893	872	851
Multi-Family	361	347	340	-17.6	403	376	356
Starts By Region
Northeast	135	85	124	27.4	115	111	112
Midwest	196	206	209	15.3	170	170	180
South	809	861	753	9.0	689	630	602
West	407	376	351	15.3	322	337	314
Building Permits	1,639	1,544	1,545	8.5	1,386	1,329	1,285

 

Manufacturing Activity in Kansas City Fed District Slows in November
by Tom Moeller    December 17, 2020

• Growth continued though at a slower pace than in October.

• Increases in orders, production and employment slowed.

• Expectations for six months ahead also ebbed slightly.

The Federal Reserve Bank of Kansas City reported that its manufacturing sector business activity index slipped to 11 in November from 13 in October. The headline figure remained well above the all-time low of -30 posted in April.

The ISM-Adjusted Index (NSA) slipped to 53.9 in November from 56.2 in October, still well above the critical 50 level that separates expansion from contraction. It also remained well above the low of 37.6 in April

The slowdown in current conditions measures was relatively broad-based. New orders fell to 19, its lowest level since July. Production slipped to 20. Shipments and employment each plunged in November with shipments dropping to 3, its lowest reading since May, and employment falling to 1, its lowest reading since June.

On the inflation front, the prices received index for finished products rebounded some in November, rising to 7 after having fallen to 4 in October, though that remained up from the deflationary readings seen earlier this year. The raw materials index remained elevated at 32, down only slightly from its 34 reading in October. The October reading was the highest since November 2018.

The expectations-in-six months composite reading edged down to 20 in November from 21 in October though it remained up sharply from -19 in March. Expected new orders and production were unchanged in November. Expected shipments rose to 29, its highest reading since January 2018, while expected employment slipped.

Expectations of prices received rose to 30 in November from 26. Expectations of prices paid for raw materials fell to 50 in November from 55 in October, but the October reading was the highest since September 2018.

The composite index is an average of the production, new orders, employment, supplier delivery time and raw materials inventory indexes. The diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. The November survey was conducted during the six-day period from November 10-16, 2020 and included 109 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico and western Missouri. Data for the Kansas City Fed Survey can be found in Haver's SURVEYS database.

Kansas City Federal Reserve Manufacturing Survey (SA)	Dec	Nov	Oct	Dec'19	2020	2019	2018
Conditions Versus One Month Ago (% Balance)		11	13	-2		0	17
ISM-Adjusted Composite Index (NSA)		53.9	56.2	49.4		50.0	58.9
New Orders Volume		19	26	-4		-3	17
Number of  Employees		1	9	-7		-1	17
Production		20	23	-2		2	19
Prices Received for Finished Product		7	4	3		7	22
Expected Conditions in Six Months		20	21	16		12	28
New Orders Volume		24	24	28		17	35
Number of Employees		17	22	7		15	33
Production		31	31	27		19	40
Prices Received for Finished Product		30	26	17		26	42