Unfortunately, it does not appear that the construction industry is headed for a turnaround, yet. Last week, the U.S. Department of Commerce, Housing and Urban Development issued a report on new residential construction through August, 2011. The report noted that housing starts were down 5 percent from last July, which is the lowest it had been in three months. And this represents less than half the number of homes that economist say would be needed for a healthy housing market.
The report also noted that private sector spending on construction grew by 5.5 percent since July, 2010, while public sector demand fell by 8.8 percent. These figures are certainly disappointing given all the press devoted to federallyl funded shovel ready projects .
There was, however, a glimmer of hope in the report. Building permits rose 3.2 percent. But, given that homebuilders typically request permits up to six months before they start building and large apartment complexes pull permits up to a year before building, the recovery may still take some time.
While the Department of Commerce’s report was not rosy, the Associated General Contractors of America reported that construction employment rose in 146 of 337 metro areas. The Association’s Chief Economist noted that while there are some increases, there are also decreases, with southern California leading the way in losses.
So, it looks like we have a bit farther to travel on this road to recovery. But, there are some signs that things are improving, albeit slowly.