Homebuilding in America fell unexpectedly in September and permits to build homes plunged to their lowest level in a year, amid acute shortages of raw materials and labor. That reinforces forecasts that economic growth slowed sharply in the third quarter.
A report from the US Commerce Department on Tuesday (19/10), also showed home construction completion reached its lowest level in 13 months. This followed news on Monday (18/10) that production at US factories fell by the most in seven months in September. Demand was strong as the world economy began to recover from the COVID-19 pandemic, now battling a staggering shortage of supply chain workers.
“Demand levels still seem positive,” said Rubeela Farooqi, US economist at High Frequency Economics in White Plains, New York. “But supply still has to be restored, given higher costs and material shortages remain a drag for home builders.”
Home construction starts fell 1.6% to a seasonally adjusted annual rate of 1,555 million housing units last month, the lowest level since April. Data for August was revised down to 1,580 million units from the previously reported 1,615 million units. [ps/jm]