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Report from
North America
Hints of improvement as building permit
numbers rise
U.S. homebuilding increased less than expected in May,
but a strong rebound in permits for future home
construction suggested the housing market was starting to
emerge from the COVID-19 crisis along with the broader
economy.
Housing starts rose 4.3% to a seasonally adjusted annual
rate of 974,000 units in May, the U.S. Department of
Commerce said. The increase recouped only a fraction of
the more than 40% cumulative decline in homebuilding in
March and April. Starts dropped 23% on a year-on-year
basis in May.
The rise in starts last month was tempered by a tiny gain in
single-family homebuilding, which accounts for the largest
share of the housing market, to a rate of 675,000 units.
Decreases in homebuilding in the Midwest (down 1.5%)
and populous South (down 16%) offset robust increases in
the West (up 69.8%) and Northeast (up 12.8%).
See:
https://www.census.gov/construction/nrc/pdf/newresconst.pdf
Permits for future home construction rebounded 14% to a
rate of 1.22 million units in May, reinforcing economists¡¯
expectations that the housing market will lead the
economy from the recession, driven by historically low
mortgage rates. Applications for loans to buy a home
surged to a near 11-1/2-year in mid-June.
Home sales fall but rebound anticipated
Existing-home sales fell in May, marking a three-month
decline in sales as a result of the COVID-19 outbreak,
according to the National Association of Realtors (NAR).
Total existing-home sales slumped almost 10% from April
to a seasonally-adjusted annual rate of 3.91 million in
May. Overall, sales are down 27% from a year ago (5.33
million in May 2019).
Lawrence Yun, NAR¡¯s chief economist said ¡°Sales
completed in May reflect contract signings in March and
April ¨C during the strictest times of the pandemic
lockdown and hence the cyclical low point. Home sales
will surely rise in the upcoming months with the economy
reopening.¡±
U.S. cabinets sales down sharply
According to the Kitchen Cabinet Manufacturers
Association¡¯s monthly Trend of Business Survey,
participating cabinet manufacturers reported a 22%
decrease in overall cabinet sales for April 2020 compared
to the same month in 2019. Custom sales are down
30.4%, semi-custom decreased 25.4%, and stock sales
decreased 17.8%.
The results of the economic shutdown from COVID-19
can be seen in the monthly numbers. Overall cabinet sales
were down 31% in April 2020 compared to March.
Custom sales decreased 36%; semi-custom sales decreased
32%; and stock sales decreased almost 30% compared to
the previous month.
Overall, year-to-date cabinet sales are down slightly at 1%
due to the April dip. Custom sales decreased 4%, semicustom
sales are down 6%, and stock sales remain strong
at an increase of 3.2% YTD.
Building material prices move higher
Prices paid for goods used in residential construction
increased almost 1% in May (not seasonally adjusted)
according to the latest Producer Price Index (PPI) report
released by the U.S. Bureau of Labor Statistics. May
marks only the fourth monthly increase in the past 12
months in the price index for residential construction
inputs.
The index has declined 4.8% year-to-date, nearly four
times the magnitude of the prior record for a May year-todate
decrease (-1.3% in 2009). Prices paid for goods used
in residential construction have fallen between January
and May just three times since 2000.
Prices in the Northeast advanced 0.3% in May, were
unchanged in the South, and fell 0.5% and 1.5% in the
Midwest and West regions, respectively (not seasonally
adjusted).
Unemployment still above 20% in Nevada, Michigan
and Hawaii
The unemployment rate fell in 43 U.S. states and
Washington, D.C. in May as the economy began to reopen
and more employees returned to their jobs, but the number
of people not working still stood near record highs and
was particularly acute in places like Nevada, Hawaii and
Michigan.
The unemployment rate fell the most last month in
Mississippi, dropping to 10.6% from 16.3% in April. The
jobless rate also fell sharply in Kentucky, Indiana, Nevada,
Arizona and Tennessee. Even after falling in May, though,
Nevada still had the highest unemployment rate in the
country at 25.3%. Hawaii was a close second at 22.6%.
Earlier this month the U.S. Bureau of Labor Statistics
reported the U.S. regained 2.5 million jobs in May and the
unemployment rate fell to 13.3%. On June 15, the BLS
provided the state-by-state breakdown of the data for May.
Unemployment is also still extremely high in states with
large numbers of COVID-19 cases or stricter lockdown
orders such as Michigan. That state, site of the some of the
biggest anti-lockdown protests, saw just a small decline in
unemployment in May to 21.2%.
Unemployment rose in five states, with the biggest
increase coming in Minnesota, where mass protests took
place after the killing of African-American George Floyd
by police.
The jobless rate rose to 9.9% from 8.7%, though it¡¯s
unclear if the incident contributed. A series of sometimes
violent protests didn¡¯t take place until the end of the
month.
Unemployment has been lower in less populated states
with smaller numbers of coronavirus cases, mostly in the
Midwest and Southern parts of the country. States in those
regions did not shut down quite as extensively.
The government said earlier this month the unemployment
rate dropped to 13.3% in May from a modern record of
14.7% in April. Most economists think the real jobless rate
is closer to 20%.
See:
https://www.marketwatch.com/story/unemployment-ratefalls-in-43-states-in-may-but-still-tops-20-in-nevada-michiganand-hawaii-2020-06-19
States reporting a rise in new coronavirus infections
The first wave of coronavirus in the U.S. is not yet over
according to experts. Nearly half of all states are reporting
a rise in new cases and some continue to break records in
their daily reported cases. In the South, officials say more
young people are testing positive. Experts continue to
repeat warnings highlighting the need for social distancing
and face covers.
While some point to the rise in numbers as a result of
more testing health officials say increased testing is only
partly to blame. Parts of the country remain divided on
wearing face masks in public and more officials have had
to consider making face covers in public a requirement.
The 23 states seeing a rise in new reported cases compared
to the previous week, according to data from Johns
Hopkins University, are: Arizona, California, Colorado,
Delaware, Florida, Georgia, Hawaii, Idaho, Kansas,
Kentucky, Michigan, Missouri, Montana, Nevada, Ohio,
Oklahoma, South Carolina, Tennessee, Texas, Utah,
Washington, West Virginia and Wyoming.
Experts are concerned about the rise in infections in
Florida saying the state could become the next US
coronavirus epicenter. On 20 June Florida reported 4,049
new cases, the most reported in a single day.
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