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Report from
North America
Housing starts surge
US homebuilding and permits surged in December as
historically low mortgage rates supported the
homebuilding market, but momentum could slow amid
surging lumber prices and a shortage of labor.
Housing starts jumped 5.8% to a seasonally adjusted
annual rate of 1.669 million units in December, the US
Department of Commerce reported.
Homebuilding increased 5.2% on a year-on-year basis.
Starts totalled 1.380 million in 2020, up 7.0% from 2019.
Single-family homebuilding, the largest share of the
housing market, soared 12.0% to a seasonally adjusted
annual rate of 1.338 million units.
Single-family starts have increased for eight straight
months and accounted for more than 80% of US
homebuilding in December, the highest percentage since
2010.
Housing starts were up strongest in the Midwest, growing
32.1% for the month, while starts rose more modestly in
the West (10.2%) and the South (5.5%). However, housing
starts in the Northeast fell by 34.8% and were 24.1% off
totals from the previous December.
A National Association of Home Builders survey showed
a dip in confidence among single-family homebuilders in
January.
Builders complained about ¡°supply-side constraints related
to lumber and other material costs, a lack of affordable lots
and labor shortages that delay delivery times and put
upward pressure on home prices.¡±
Softwood lumber prices surged 52.2% on a year-on-year
basis in December according to data from the Labor
Department.
Existing-home sales reach highest level in 14 years
Sales of previously owned homes in the US rose in 2020
to the highest level since 2006, as ultra-low interest rates
and remote work during the pandemic increased homebuying
demand.
Existing-home sales rose 0.7% in December from
November to a seasonally adjusted annual rate of 6.76
million, the National Association of Realtors said Friday.
The December sales marked a 22% increase from a year
earlier.
Existing-home sales totaled 5.64 million in 2020, up 5.6%
from 2019 and the highest level since the 2006 pace of
6.48 million, NAR said.
December 2020 saw existing-home sales in the Northeast
climb 4.5%, recording an annual rate of 930,000, a 27.4%
increase from a year ago. Existing-home sales in the South
increased 1.1% to an annual rate of 2,860,000 in
December, up 20.7% from the same time one year ago.
Existing-home sales in the Midwest were unchanged,
recording an annual rate of 1,590,000 in December, but up
26.2% from a year ago. Existing-home sales in the West
fell 1.4% from the month prior, recording an annual rate of
1,380,000 in December, a 17.9% increase from a year ago.
But nationwide supply remains a challenge. In December,
there were a record low 1.07 million previously owned
homes on the market, down 23% from a year ago.
See:https://www.nar.realtor/newsroom/existing-home-sales-rise-0-7-in-december-annual-sales-see-highest-level-since-2006
New administration to address home prices and
availability
New US government plans to address high home prices
and low availability as he gears up to implement his plans
for the housing market.
From home financing to home construction, Biden's plans
are focused on affordability. Among the policies he could
push for are a $15,000 first-time homebuyer tax credit;
urging big banks to get back into Federal Housing
Administration assisted lending; encouraging new
construction of both single- and multifamily housing; and
strengthening the Community Reinvestment Act, which is
intended to help low- and moderate-income areas.
In December, the number of homes for sale plummeted
nearly 40% compared with December 2019, according to
realtor.com.
Competition for what was on the market was fierce, with
the typical home selling in just 66 days, two weeks faster
than the year before.
Home prices are also rising at the fastest pace in six years,
according to CoreLogic, more than 8% higher in
November year over year, driven by record-low interest
rates and pandemic-driven demand from buyers looking
for larger, suburban homes.
Report on Vietnam¡¯s currency valuations
In one of the Office of the United States Trade
Representative's last actions before Trump Administration
officials handed over control to the incoming Biden
Administration, USTR indicated that the agency won't
immediately impose new tariffs or take other action as a
result of its Section 301 investigation into Vietnam's
currency valuation practices.
While "USTR is not taking any specific actions in
connection with the findings at this time," it "will continue
to evaluate all available options," it said. USTR also
released the investigation report and official notice. The
agency has not yet issued a companion report from it's
Section 301 investigation into Vietnam's timber sourcing
practices.
See:https://ustr.gov/about-us/policy-offices/press-office/pressreleases/2021/january/ustr-releases-findings-section-301-investigation-vietnams-acts-policies-and-practices-related
December job losses - the first in eight months
US job creation came to a halt in December as restrictions
brought on by surging Covid-19 cases hammered virussensitive
industries, particularly bars and restaurants,
which lost nearly half a million positions.
The US Department of Labor reported that nonfarm
payrolls fell by 140,000. That was below expectations for
50,000 from economists surveyed by Dow Jones. It was
the first monthly drop since April. Manufacturing
employment increased by 38,000, but despite gains over
the past 8 months, employment in manufacturing is
543,000 below its February level.
¡°Today¡¯s report showed the economy¡¯s not just tapping on
the brakes, but actually has been thrown into reverse,¡± said
Daniel Zhao, senior economist at job search and review
site Glassdoor. January has seen US pandemic deaths top
400,000 and layoffs running at the highest level in months.
Consumer confidence shows massive partisan divide
US consumer sentiment dipped in early January as
Americans reacted to the assault on the US Capitol and a
relentless surge in COVID-19 infections and deaths, the
University of Michigan said in a report that also showed a
deep partisan divide in views on the economy and outlook.
¡°Consumer sentiment posted trivial declines in early
January despite the horrendous rise in COVID-19 deaths,
the insurrection, and the impeachment of Trump,¡±
University of Michigan Surveys of Consumers Chief
Economist Richard Curtin said in a statement.
The report revealed a chasm in economic sentiment
between Republicans and Democrats. Even as the survey¡¯s
overall reading of sentiment dipped modestly, it
plummeted to a six-and-a-half-year low among
Republicans while surging to a four-year high among
Democrats.
See:
http://www.sca.isr.umich.edu/
US manufacturing ¨C seven months of expansion
US manufacturing activity finished 2020 on a high note,
growing for the seventh consecutive month, according to
data from the Institute for Supply Management (ISM). The
ISM measure showed manufacturing expanding in
December at the fastest pace in more than two years.
Sixteen of 18 manufacturing industries reported growth in
December, led by Apparel, Leather & Allied Products,
Furniture and Related Products and Wood Products.
Each of the report¡¯s key metrics saw growth, to varying
degrees, in December. New orders rose 2.8%, production
saw a 4% increase, and employment saw a 3.1% gain.
In its Semiannual Economic Forecast, ISM predicts
continued economic improvement for both the
manufacturing and services sectors in 2021. For
manufacturing, ISM is estimating a 6.9% annual increase
in 2021 manufacturing revenue, which trailed the 10.3%
prediction made in the May 2020 edition of the report and
topped the 1.3% annual decline for 2020. Some 59% of
the report¡¯s manufacturing survey respondents are calling
for revenues to be up annually in 2021.
See:https://www.ismworld.org/supply-management-news-andreports/reports/ism-report-on-business/pmi/december/
US duties drive down imports of Chinese cabinets
Imports of Chinese cabinets and vanities continue to be
way down since the imposition of antidumping and
countervailing (AD/CVD) duties, according to US
Department of Commerce import statistics.
After peaking at almost US$160 million per month in
December 2018, imports from China plummeted
dramatically and have hovered at only $6 million per
month from June 2020 to November 2020 after the final
AD/CVD duties were imposed.
Imports of cabinets and vanities from the rest of the world
have plateaued at an average of roughly US$140 million
per month since June 2020.
Vietnam, Malaysia, and Indonesia continue to be largest
new sources of cabinets and vanities after the imposition
of AD/CVD duties on imports from China.
Focusing specifically on the increase in imports of kitchen
cabinets from the first 11 months of 2019 to the first 11
months of 2020, imports from Vietnam grew by 896% to
US$347 million, imports from Malaysia grew by 860% to
US$310 million, and imports from Indonesia grew by
1951% to US$ 77 million.
Imports from Mexico, Taiwan, and Cambodia have also
increased significantly since the imposition of AD/CVD
duties.
See:
https://www.kcma.org/news/pressreleases/KCMA_November_2020_Trade_Update
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