The June 2011 Railtime Indicators report has been released. Below are some graphs andAAR excerpts:
Who releases it and when?
- U.S. Census Bureau, around the middle of each month.
What is it and why is it important?
- A housing start is beginning the foundation of a residential home. Historically, housing has directly accounted for around 5% of the overall economy and has large spillover effects on other sectors (such as retail sales and manufacturing), since people buying new homes tend to spend on other goods such as furniture, lawn and garden supplies, and appliances.
- In the past, housing starts have often been considered a “leading indicator” because construction growth usually picks up at the beginning of a business cycle. However, various factors affecting today’s housing market — including a huge oversupply of existing houses due to slow sales and widespread foreclosures — means that new construction is a big drag on the economy today.
What are the latest numbers?
- Housing starts in April 2011 totaled 523,000 on an annualized and seasonally adjusted basis, down 10.6% from March 2011 and continuing a several years-long string of one dreary housing month after another. Housing starts in March 2011 were revised upward to 585,000. April 2011’s figure is subject to minor revision and housing starts inApril were negatively affected by tornadoes and other weather events in some areas, but for now it’s the fifth worst month since recordkeeping began in 1959. (By comparison, the top month all-time for housing starts was January 1972 when they totaled an annualized 2.49 million. The highest relatively recent month was January 2006 at 2.27 million.)
- The top 10 months in history for housing starts were all in 1972 and 1973, but new houses back then were very different from new houses today. For one thing, they were usually much smaller. The chart above right shows the average square footage of new houses each year from 1974 (when average square footage was 1,695 square feet) to 2010 (when it was 2,457 square feet — a 45% increase). There was a slight decline in the average size in 2008 from 2007, then a bigger decline in 2009 from 2008 before average size rebounded a bit in 2010.
- According to a recent survey from the National Association of Home
Builders, in 2015 the typical new single-family home will be about 2,150 square feet — about what the Census Bureau says it was in 1997. Everything else equal, smaller homes mean fewer rail cars of lumber.
- April Indicator 2011 (lumbertribedashboard.wordpress.com)
- Lumber Prices: Leading Indicator for Private Nonfarm Payrolls? (businessinsider.com)