|
Report from
North America
Housing starts move upward
Construction of new homes in the US rose 2.2% in April, as
homebuilders continue to see strong demand from buyers. Privately‐owned
housing starts in April were at a seasonally adjusted annual rate of
1.401 million. This is 2.2% above the revised March estimate of 1.371
million, but 22.3% below the April 2022 rate of 1.803 million.
Single‐family housing starts in April were at a rate of 846,000; this is
1.6% above the revised March figure of 833,000.
Both single and multi-family construction rose in April. The strength in
new construction comes from strong demand from would-be home buyers who
don’t have many options in the resale market.
Homebuilders were most active in the Midwest and West, where housing
starts rose by over 30% in both regions, but single-family construction
in the West was exceptionally strong, surging by nearly 60% in April.
Building permits, a key indicator of the pace of future construction,
fell 1.5% to a 1.42 million rate. The decline was larger than expected.
Many homeowners don’t see an incentive to sell and face a tough housing
market as 14 million mortgages were refinanced during the pandemic years
and most of them were secured with an ultra-low mortgage rate. Most
Americans feel frustrated by the housing market. A recent poll revealed
that the number of Americans who think it’s a bad time to buy a home has
hit a 45-year high.
Canadian housing starts jumped 22% in April to a seasonally adjusted
annualized rate of 261,559 units. Despite the surge, the Canadian
Mortgage and Housing Corporation (CMHC) noted higher costs for
developers and labor shortages as significant challenges in the short
term. “While both the SAAR of housing starts and the trend have returned
to levels observed before the pandemic, housing starts are expected to
drop significantly in 2023, before seeing some recovery in 2024 and
2025, according to our latest forecast,” said Aled ab Iorwerth, CMHC's
Deputy Chief Economist.
See:
https://www.census.gov/construction/nrc/current/index.html
and
https://www.cmhc-schl.gc.ca/en/professionals/housing-markets-data-and-research/housing-data/data-tables/housing-market-data/monthly-housing-starts-construction-data-tables
Home sales fall again
US existing home sales fell for a second straight month in
April, with prices rising in roughly half of the country, which together
with higher mortgage rates could delay a housing market recovery.
Existing home sales dropped 3.4% to a seasonally adjusted annual rate of
4.28 million units last month, the National Association of Realtors
said. Home resales, which account for a big chunk of US housing sales,
tumbled 23.2% on a year-on-year basis in April.
A persistently tight housing supply is making it difficult for prospective
buyers to wade back into the market to take advantage of the current
retreat in mortgage rates. Supply is unlikely to improve with many
homeowners living longer in their properties, deterred by the still-high
mortgage rates.
Sales fell in all four regions. Existing-home sales in the Northeast
receded 1.9% from March to an annual rate of 510,000 in April, down
23.9% from April 2022. In the Midwest, existing-home sales declined 1.9%
from one month ago to an annual rate of 1.02 million in April, dropping
21.5% from the prior year.
Existing-home sales in the South decreased 3.4% from March to an annual
rate of 1.98 million in April, a 20.2% decline from one year ago. In the
West, existing-home sales slipped 6.1% from the previous month to an
annual rate of 770,000 in April, down 31.3% from the previous year.
See:
https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales
and
https://www.msn.com/en-us/money/realestate/u-s-existing-home-prices-fall-nearly-1-in-march-the-biggest-drop-in-a-decade/ar-AA1a6Fek
Job market continues to outperform expectations
The April jobs report showed the US labor market remains
robust, with more than a quarter million new jobs added to the economy
last month as the unemployment rate fell to match its lowest level since
May 1969. The US economy added 253,000 nonfarm payroll jobs last month,
with the unemployment rate unexpectedly dropping to 3.4%, data from the
Bureau of Labor Statistics showed.
April marks the 13th-straight month reported job gains came in higher
than had been forecast by Wall Street economists.
Business services employment rose by 41,000 in April, while leisure and
hospitality jobs, which have been a huge driver of much of the labor
market's rebound since the pandemic, increased by 31,000. Construction
and manufacturing jobs rose by 15,000 and 11,000 in April, respectively.
See:
https://www.bls.gov/news.release/empsit.nr0.htm
Consumer sentiment slumped in May
US consumers' concerns about the economy grew notably in May,
coinciding with the diffusion of unfavorable economic news, especially
the debt ceiling crisis. The preliminary estimates for the University of
Michigan consumer sentiment index sharply dropped from 63.5 in April to
57 in May, marking a 9.1% monthly decrease and falling short of the
expected 63 reading. "After two years of relative stability, long-run
inflation expectations rose to their highest reading since 2011,” said
Survey director Joanne Hsu.
See:
http://www.sca.isr.umich.edu/
US manufacturing sector contracts for sixth month
Economic activity in the manufacturing sector contracted in
April for the sixth consecutive month following a 28-month period of
growth, say the nation's supply executives in the latest Manufacturing
ISM Report On Business.
While the April index fell below the 50% level that indicates growth,
the 47.1% rating was an improvement over the March rating.
“The US manufacturing sector contracted again; however, the
Manufacturing PMI improved compared to the previous month, indicating
slower contraction,” said ISM Chair Tim Fiore. “The April composite
index reading reflects companies continuing to manage outputs to better
match demand for the first half of 2023 and prepare for growth in the
late summer/early fall period.”
Once again, the Furniture & Related Products industry and the Wood
Products industry reported the largest monthly contraction among the 18
industries surveyed by ISM.
See:https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/march/
and
https://www.msn.com/en-us/money/savingandinvesting/ism-manufacturing-index-increased-to-47-1-in-april/ar-AA1aANnj
Duties on China's hardwood plywood to remain in place
The US International Trade Commission (USITC) has determined
that revocation of the existing anti-dumping and countervailing duty
orders on certain hardwood plywood products from China would have
negative consequences. Specifically, revocation could lead to material
injury to US industry. As a result of the Commission’s determination,
the existing duties, many of which exceed 200%, will remain in place.
This action comes under the five-year (sunset) review process required
by the Uruguay Round Agreements Act. The commission’s report will be
available by June 16 on the USITC website.
See:
https://www.usitc.gov/press_room/news_release/2023/er0511_63892.htm
| 
