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Report from
North America
US housing starts post bigger-than-expected increase
Construction of new homes rose 3% in June as builders
scaled up new projects. Housing starts rose to a 1.35
million annual pace from 1.31 million in May the US
Department of Commerce reported. The data exceeded
what Wall Street was expecting, which was a 1.3 million
rise. All numbers are seasonally adjusted. But the pace of
construction has been trending at lower levels in recent
months as builders grapple with elevated financing costs
as well as 7% mortgage rates that have dampened home-
buying activity.
A big increase in multifamily housing starts led to
increased home construction overall even as single-family
starts trended lower Apartment starts rose by 22% in June.
The unexpected increase in June housing starts “is actually
less impressive than it may appear at first glance,” since
the monthly increase was boosted by multifamily starts,
which are typically volatile, Stephen Stanley, an
economist at Santander, wrote.
Single-family starts, on the other hand, were down 2.2% in
June, falling for the fourth month in a row and sinking
below 1 million for the first time since October 2023.
The pace of construction was mixed across the US. The
biggest declines in home building were in the West, which
saw a 6% drop. But the Northeast posted a 34% increase
in starts in June. Single-family homebuilding fell in the
Northeast and the West but increased in the densely
populated South and the Midwest, which is considered a
more affordable region. Building permits, a sign of future
construction, rose 3.4% to a 1.45 million rate.
See https://www.census.gov/construction/nrc/current/index.html,
https://www.msn.com/en-us/money/realestate/housing-starts-
post-bigger-than-expected-increase-in-june/ar-
BB1q91va?ocid=BingNewsVerp
and
https://www.msn.com/en-us/money/other/us-single-family-
housing-starts-slump-to-eight-month-low/ar-
BB1q9tk7?ocid=BingNewsVerp
Canada home-building cools
Canada’s housing agency says the annual rate of housing
starts in June fell 9% compared with May. The Canada
Mortgage and Housing Corp. reported that the seasonally
adjusted annual rate of housing starts in June amounted to
241,672 units, down from 264,929 in May.
“The higher interest rate environment appears to have
caught up with some of Canada’s major centres as lower
multi-unit starts, particularly in Vancouver and Toronto,
drove both the (seasonally adjusted annual rate) and trend
down in June," said CMHC chief economist Bob Dugan.
The actual number of housing starts in urban centers
across Canada was down 13% to 20,509 units in June
compared with 23,518 units a year earlier. CMHC
attributed the decrease to lower multi-unit starts.
See 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
and
https://www.msn.com/en-ca/news/canada/cmhc-says-annual-
pace-of-housing-starts-in-june-down-9-from-may/ar-
BB1q4ZdJ?ocid=BingNewsVerp
Jobs market remains stable
Halfway through 2024, US job gains are cooling slightly
but overall employment activity remains solidly stable.
The US added 206,000 jobs in June according to US
Bureau of Labor Statistics, easing from a downward
revised May tally of 215,000 jobs. The unemployment rate
moved a little higher, up 0.1 percentage points to 4.1%,
marking the first time since November 2021 that the
jobless rate was above 4%.
That’s not too bad at a time when interest rates are at a 23-
year high and the Federal Reserve is looking for inflation
and overall demand to cool before bringing down rates.
June’s job gains were more broadly based than they have
been in the past few months, but the growth was largely
concentrated in two sectors: government and health care.
Manufacturing lost 8,000 jobs in June while construction
added 27,000 jobs, higher than the average monthly gain
of 20,000 over the prior 12 months.
See https://www.bls.gov/news.release/empsit.nr0.htm
and
https://www.msn.com/en-us/money/markets/key-takeaways-
from-the-june-jobs-report/ar-BB1pszqL?ocid=BingNewsSerp
Consumer sentiment falls to 8-month low on
frustration with inflation
Consumers’ optimism about the economy fell to an eight-
month low in July over frustration with high prices, even
though they expect inflation to slow over the next year.
The first reading of the consumer sentiment index in July
dropped to 66.0 in July from 68.2 in June, the University
of Michigan said. It was the fourth decline in a row and
the weakest reading since November.
While sentiment is trending downward, Index Director,
Joanne Hsu, says consumer’s perceptions have not moved
much in recent months. “July's reading was a statistically
insignificant 2 index points below last month, well within
the margin of error,” Hsu said adding “although sentiment
is more than 30% above the trough from June 2022, it
remains stubbornly subdued.
See http://www.sca.isr.umich.edu/
and
https://www.msn.com/en-us/money/markets/consumer-
sentiment-falls-to-8-month-low-on-frustration-with-inflation/ar-
BB1pSgqD?ocid=BingNewsVerp
US manufacturing contracts for third month in a row
US manufacturing contracted for a third straight month in
June as demand remained subdued, while a drop in a
measure of prices paid by factories for inputs to a six-
month low suggested that inflation could continue to
subside.
The weakness at the end of the second quarter reported by
the Institute for Supply Management on Monday was
across the board with ISM Manufacturing Business Survey
Committee Chair Timothy Fiore describing manufacturers
as demonstrating "an unwillingness to invest in capital and
inventory due to current monetary policy and other
conditions."
Manufacturing is being pressured by higher interest rates
and softening demand for goods, though business
investment has largely held up. "We expect the
manufacturing sector to remain weak over the next couple
of quarters," said Oliver Allen, senior US economist at
Pantheon Macroeconomics."
The ISM's manufacturing PMI slipped to 48.5 last month
from 48.7 in May. A PMI reading above 50 indicates
growth in the manufacturing sector, which accounts for
10.3% of the economy. The Wood Products sector was
among the nine industries reporting contraction in June
while the Furniture & Related Products sector was among
the eight industries reporting growth.
See https://www.reuters.com/markets/us/us-manufacturing-
mired-weakness-prices-paid-gauge-hits-six-month-low-2024-07-
01/
Findings on wooden cabinet imports from China upheld
The US Department of Commerce has upheld its
preliminary determinations on the scope of antidumping
and countervailing duty orders on imports of wooden
cabinets, vanities and components (“WCV”).
The Kitchen Cabinet Manufacturers Association reported
that the Commerce Department had announced the "Final
Results of KCMA’s Scope and Circumvention Petition,"
and that the US Department of Commerce is making no
changes." This means that Commerce continues to find
Scenarios 1, 2, and 3 that KCMA defined are covered by
the scope of the antidumping and countervailing duty
orders on WCV from China the KCMA reports.
In addition, Commerce will impose a new certification
process where both importers and exporters will be
required to certify that each shipment of WCV from
Malaysia and Vietnam does not contain finished and/or
unfinished Chinese cabinet components, including the
doors, drawer faces, and frames.
Certifications must be signed for every shipment of WCV
from Malaysia and Vietnam to the United States. In
addition, documents supporting the certifications must be
retained for five years from the date of importation.
See
https://www.woodworkingnetwork.com/news/woodworking-
industry-news/commerce-department-upholds-preliminary-
import-findings
and
https://www.federalregister.gov/documents/2024/07/17/2024-
15681/wooden-cabinets-and-vanities-and-components-thereof-
from-the-peoples-republic-of-china-final-scope
Remodeling spending expected to trend higher
Homeowner expenditure for improvements and repairs are
expected to trend up through the first half of 2025
according to the Leading Indicator of Remodeling Activity
(LIRA) released by the Remodeling Futures Program at
the Joint Center for Housing Studies of Harvard
University.
The LIRA projects that declines in annual spending for
renovations and maintenance to owner-occupied homes
will ease to just -0.5% through the second quarter of 2025.
Carlos Martín, Director of the Remodeling Futures
Program said “economic uncertainty and continued
weakness in home sales and the sale of building materials
are keeping a lid on residential remodeling, although many
drivers of spending are starting to firm up again,” says at
the Center.”
According to LIRA annual spending on homeowner
improvements and maintenance is expected to reach
US$466 billion through the second quarter of next year, on
par with spending over the past four quarters.
See https://www.woodworkingnetwork.com/news/woodworking-
industry-news/remodeling-spending-trend-upwards-through-
2025
and
https://www.jchs.harvard.edu/press-releases/remodeling-
spending-tick-through-mid-year-2025
Disclaimer: Though efforts have been made to ensure
prices are accurate, these are published as a guide only.
ITTO does not take responsibility for the accuracy of this
information.
The views and opinions expressed herein are those of
the correspondents and do not necessarily reflect those
of ITTO
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