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US:Housing starts rise in October

Mon, Nov 9 2009, 17:51 GMT
by Economic and Strategy Team

National Bank of Canada


Annual rate
Latest : 157.3K (actual); 158.5K (forecast);
Previous 149.3K (revised from 150.1K)

FACTS: Canadian housing starts increased by 5.4% in October to 157.3K units from an downwardly revised 149.3K units in September. Urban starts rose 5.2% to 139.9K while starts in rural areas advanced by 6.8%. Single family units in urban areas fell to 67.3K from 69.2K while multi family units in urban areas surged to 72.6K from 63.8K. On a regional basis, Ontario showed the strongest performance adding 7.4K units to 57.6K while Quebec experienced the largest decline with starts down 4.1K to 37.2K on the month.

OPINION: Housing starts rebounded in October and rose to the highest level since December 2008. The advance was led by multiple dwelling starts which rose to an eleven month high. Despite a decrease in single family units in October, the 3-month trend for this segment of the market is clearly up. Market indicators point to additional expansion in residential investment
over the next few months. Residential building permits supports the view that increased activity is in the pipeline with permits increasing over the last two months.  Importantly single unit permits, a leading indicator for single unit starts continues to advance implying that the number of single housing starts will continue to improve going forward. Inventory levels of unabsorbed inventories are also providing positive feedback. Inventories in singles dwellings shrank again in
September, marking a sixth consecutive decrease.
 
These observations suggest that the housing market environment remains supportive that the housing sector will continue to expand in the fourth quarter. Initial data points to an increase in units of 29% (annualized rate) in Q4 over Q3. This bodes well for residential investments on a national accounts basis. All-in-all today’s report remains supportive of our view that the  canadian housing market and the economy as a whole are in recovery mode.

Published on  Mon, Nov 9 2009, 17:53 GMT

National Bank of Canada  | 1100 University, 11th floor Montreal (Québec) H3B 2G7
http://www.nbc.ca/ | info@nbc.ca

Legal disclaimer and risk disclosure

This presentation may contain certain forward-looking statements about the 2009 Economic and Financial Outlook. Such statements are subject to risk and uncertainties. Actual results may differ materially due to a variety of factors, including legislative or regulatory developments, competition, technological change and economic conditions in Canada, North America or internationally. These and other factors should be considered carefully and readers should not rely unduly on National Bank of Canada’s forward-looking statements. This presentation may not be reproduced in whole or in part, or further distributed or published or referred to in any manner whatsoever, nor may the information, opinions or conclusions contained in it be referred to without in each case the prior express consent of National Bank.

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