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Report from
North America
Existing home sales rebounded in October
US existing home sales rebounded sharply in October,
posting the first annual gain since mid-2021 as buyers
rushed into the market to take advantage of a brief decline
in mortgage rates.
Home sales jumped 3.4% last month to a seasonally
adjusted annual rate of 3.96 million units, the National
Association of Realtors (NAR) reported. Economists
polled by Reuters had forecast home resales rebounding to
a rate of 3.93 million units. Sales slumped to a rate of 3.83
million units in September, which was the lowest since
2010.
"The worst of the downturn in home sales could be over,
with increasing inventory leading to more transactions,"
said Lawrence Yun, the NAR's chief economist.
Existing-home sales in the Northeast in October grew
2.2% from September to an annual rate of 470,000,
identical to October 2023. In the Midwest, existing-home
sales bounced 6.7% in October to an annual rate of
950,000, up 1.1% from the prior year. Existing-home sales
in the South climbed 2.9% from September to an annual
rate of 1.77 million in October, up 2.3% from one year
before. In the West, existing-home sales increased 1.3%
in October to an annual rate of 770,000, up 8.5% from a
year ago.
Housing starts tumble
New residential construction in the US tumbled by more
than expected in October, according to the US Department
of Commerce.
Their latest report said housing starts dove by 3.1% to an
annual rate of 1.311 million in October after slumping by
1.9% to a revised rate of 1.353 million in September.
Economists had expected housing starts to decrease by
1.8% to an annual rate of 1.330 million from the 1.354
million originally reported for the previous month.
Construction activity in the South, which makes up the
largest share of homebuilding in the country, slumped
8.8% as the region’s builders put off projects in the wake
of hurricanes Helene and Milton. Housing starts have
struggled to gain traction this year against a backdrop of a
growing number of new homes for sale and mortgage rates
near 7%.
Single-family housing starts, which account for the bulk of
homebuilding, plunged 6.9% to a seasonally adjusted
annual rate of 970,000 units last month. Single-family
starts dropped 10.2% in the South.In Canada, the annual
pace of housing starts in October rose 8% compared with
September. The national housing agency said the
seasonally adjusted annual rate of housing starts was
240,761 units in October, up from 223,391 in September.
Canada Housing and Mortgage Corporation chief
economist Bob Dugan said the Prairies, Quebec and
Atlantic provinces have seen higher activity this year,
while Ontario and British Columbia recorded declines.
See: https://finance.yahoo.com/news/us-housing-starts-slide-3-
140344166.html?guccounter=1
Builder confidence increases for third month
Builder sentiment improved for the third straight month
and builders expect market conditions will continue to
improve with Republicans winning control of the White
House and Congress. Builder confidence in the market for
newly built single-family homes was 46 in November, up
three points from October, according to the National
Association of Home Builders (NAHB)/Wells Fargo
Housing Market Index (HMI).
“With the elections now in the rearview mirror, builders
are expressing increasing confidence that Republicans
gaining all the levers of power in Washington will result in
significant regulatory relief for the industry that will lead
to the construction of more homes and apartments,” said
NAHB Chairman Carl Harris, a custom home builder from
Kansas. “This is reflected in a huge jump in builder sales
expectations over the next six months.”
“While builder confidence is improving, the industry still
faces many headwinds such as an ongoing shortage of
labor and buildable lots along with elevated building
material prices,” said NAHB Chief Economist Robert
Dietz.
See:
https://www.woodworkingnetwork.com/news/woodworking-
industry-news/builder-confidence-increases-third-month-
election-uncertainty-lifts
and
https://www.nahb.org/news-and-economics/press-
releases/2024/11/builder-confidence-moves-higher-as-election-
uncertainty-is-lifted
US hiring slows
Employers added just 12,000 jobs in October as hiring
slowed substantially. The total was expected to be
constrained by two Southeast hurricanes and several
worker strikes, but the tally was far lower than what was
estimated and job gains for previous months were revised
sharply downward, raising concerns about a weakening
labour market.
But temporary hurdles make it challenging to get a true
reading of the labor market’s underlying health,
economists said. Hurricanes Helene and Milton likely
reduced employment last month by about 70,000 in the
Southeast, Oxford Economics estimated. Goldman Sachs
expected a smaller impact of 40,000 to 50,000 jobs.
Hurricane Helene hit Florida's Gulf Coast on September
26, well before the US Department of Labor conducted its
jobs survey, the agency noted, but Milton struck during the
week of the survey.
Meanwhile, an ongoing Boeing strike – along with smaller
walkouts at Textron, an aerospace parts maker, and Hilton
Hotels – likely suppressed payrolls by about 40,000,
according to research firm Nomura.
Manufacturing lost 46,000 jobs, largely because of the
Boeing strike. Leisure and hospitality and construction
were virtually flat amid the storms.
See: https://www.bls.gov/news.release/empsit.nr0.htm
Third quarter US real GDP
US third quarter real Gross Domestic Product grew at an
annual rate of 2.8%, according to an advance estimate
from the Bureau of Economic Analysis (BEA).
The third quarter GDP growth "primarily reflected
increases in consumer spending, exports, and federal
government spending," according to the BEA.
GDP growth was slightly less than expected by
economists surveyed by Dow Jones. They had expected
3.1% real GDP growth in the third quarter. Second quarter
GDP growth was initially reported as 2.8% and revised
upward to 3% in August.
"Compared to the second quarter, the deceleration in real
GDP in the third quarter primarily reflected a downturn in
private inventory investment and a larger decrease in
residential fixed investment," the BEA said in a statement.
"These movements were partly offset by accelerations in
exports, consumer spending, and federal government
spending. Imports accelerated."
See: https://www.bea.gov/data/gdp/gross-domestic-product
Consumer sentiment rose in November
US consumer sentiment rose to a seven-month high in
early November, with a measure of households'
expectations for the future climbing to the highest in more
than three years, led by brightening outlooks among
Republicans, a monthly survey by the University of
Michigan showed.
While current conditions were little changed, the
expectations index surged across all dimensions, reaching
its highest reading since July 2021. Note that interviews
for this survey concluded before the election and thus do
not capture any reactions to election results.
"Expectations over personal finances climbed 6% in part
due to strengthening income prospects, and short-run
business conditions soared 9% in November," survey
Director Joanne Hsu said in a statement. "Long-run
business conditions increased to its most favorable reading
in nearly four years."
Sentiment is now nearly 50% above its June 2022 trough
but remains below pre-pandemic readings.
See: http://www.sca.isr.umich.edu/
Manufacturing dropped to 15-month low in October
US manufacturing activity slumped to a 15-month low in
October and factories faced higher prices for inputs. The
Institute for Supply Management (ISM) reported its
manufacturing PMI fell to 46.5 last month, the lowest
level since July 2023, from 47.2 in September. A PMI
reading below 50 indicates contraction in the
manufacturing sector, which accounts for 10.3% of the
economy.
October marked the seventh consecutive month that the
PMI remained below the 50 threshold but above the 42.5
level that the ISM said over time generally indicates an
expansion of the overall economy.
“Demand remains subdued, as companies continue to
show an unwillingness to invest in capital and inventory
due to concerns (for example, inflation resurgence) about
federal monetary policy direction in light of the fiscal
policies proposed by both major parties,” wrote ISM Chair
Timothy Fiore.
Of the 18 manufacturing industries surveyed by ISM, five
reported growth and 11 reported contraction in October.
Manufacturing for both the Wood Products sector and the
Furniture & Related Products were flat in October, as each
reported neither contraction nor growth. The overall
decline in the PMI could reflect a strike by factory
workers at aviation giant Boeing.
See: https://www.reuters.com/markets/us/us-manufacturing-
drops-15-month-low-october-2024-11-01/
Hardwood logging in eastern US
The Wall Street Journal has written the hardwood logging
industry, a fixture of the economy in the Eastern US’s
Appalachian region, has been in decline for decades. A
series of shocks since 2018 has accelerated the decline: a
trade war with China, a collapse in exports due to Covid,
China’s real-estate slump and falling US home building.
After President Donald Trump imposed steep tariffs on
China in 2018, China retaliated by hitting wood exports
with tariffs of up to 25%, targeting rural areas that favored
Trump.
With Trump vowing new, 60% tariffs on Chinese imports,
US hardwood producers are bracing for another hit that
could be even more painful.
“It was really devastating to the lumber industry, what
took place last time,” said Tim Brownlee, who is chief
operating officer of the mill that buys logs from
Zimmerman and is chairman of the American Hardwood
Export Council.Zimmerman said he hasn’t paid much
attention to US trade policy but knows anything that
affects the sawmills could affect loggers. “If they don’t
have the markets to move the material, then there’s no
sense in cutting the material,” he said.
See: https://www.msn.com/en-us/money/other/logging-is-a-way-
of-life-in-appalachia-it-s-hanging-on-by-a-thread/ar-
AA1taj1z?ocid=BingNewsVerp
Furniture imports and exports rebounded in first half
of 2024
After a tumultuous 2023, the first half of 2024 shows
furniture imports on the upswing, while exports of US
made products also made gains.
Countries doing business with the United States sent about
US$12.6 billion worth of household furniture to American
suppliers, a 5% increase over the same period last year. To
put it in context, however, that figure is still about 26%
below the US$17.1 billion in furniture imported in the first
half of 2022.
Vietnam, which has held the No. 1 spot for a few years
now, continues its leadership position at US$4.4 billion in
imports, which is up 19% over to the first six months of
2023. Vietnam’s share of the total market is about 35%,
while second-place China has around 26%. China
registered a modest gain, growing by 2%. Among this
year’s Top 10 sourcing countries for household furniture
imports, five saw their totals decline year-over-year for the
period: Mexico, Canada, Indonesia, India and Thailand.
Exports of household furniture from the United States to
other countries rose by 10% In the first half of the year to
more than US$1.217 billion, which translates to a healthy
gain over 2023 when exports were down 8%. In fact, the
figure eclipses by US$10 million its 2022 figure for the
same period.
Canada remains the largest trading partner, with exports to
America’s northern neighbor up 12% to more than
US$782 million. Mexico, which increased its total by 2%,
is still a distant second at US$92 million. Only the United
Kingdom, which is the United States’ No. 3 customer,
imported less in early 2024 than previously, down by 6%.
See: https://www.furnituretoday.com/research-and-
analysis/furniture-imports-exports-rebound-in-first-half-of-2024/
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