By Agence France-Presse
New home building dipped again in March after plunging in February, with declines in single-family and apartment construction spread over most of the country, according to US government data released Friday.
And while permits for new home construction also declined last month, the data show the backlog of projects waiting to get underway has surged to the highest in 12 years, likely reflecting continued labor shortages that for months have crimped building.
Construction of new homes dipped 0.3 percent compared to February, to an annual rate of 1.139 million, the lowest in nearly two years and more than 14 percent below March 2018, the Commerce Department reported.
It was a disappointing result since economists had forecast a pickup after the dismal figures in February.
The building of single-family homes was down 0.4 percent from the prior month, while apartment construction dropped 3.4 percent, and both categories showed double-digit declines for the latest 12 months, according to the data.
The western United States was the only region to see an overall increase in construction, surging more than 34 percent, as California starts to rebuild from massive wildfires.
New building permits issued in March fell 1.7 percent compared to the prior month and dropped nearly eight percent from a year ago — the West again providing the only exception.
However, projects that have been authorized but not started has held at 197,000 for three months, the highest level since June 2007 and 23 percent more than March 2018.
Economist Conrad DeQuadros, of RDQ Economics, said the “construction worker shortage is likely the main reason for this backlog,” and is a factor mentioned in many economic reports from the industry as well as from the Federal Reserve’s “beige book” survey of the economy.
However, “We believe that the growth of households, in part due to a solid labor market, will support stronger demand for housing units and we look for a pickup in construction activity in the months ahead.”