US housing starts drop 7.0% in July
Housing starts fell by 7.0% in July from the previous month, the U.S. Census Bureau reported Wednesday.
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Housing starts slide in July
According to the Census Bureau, U.S. housing starts reached a seasonally adjusted annual rate of 1,534,000 in July.
However, the July rate picked up by 2.5% from July 2020.
Meanwhile, single‐family housing completions reached a rate of 954,000, or up 3.6% from the June rate of 921,000. The July rate for units in buildings with five units or more reached 426,000.
Contractors face rising prices
Earlier this year, surging lumber prices commanded headlines, impacting construction projects across the country.
While lumber prices did eventually retrace after a torrid May, they remain at historically high levels.
Contractors are grappling with rising prices for all types of construction inputs, not just lumber.
“Extreme price increases continued in July for a wide range of goods and services used in construction, according to an analysis by the Associated General Contractors of America of government data released today,” the Associated General Contractors of America wrote. “Association officials urged President Biden to immediately end tariffs and quotas on steel, aluminum, lumber and other essential construction items to help stave off inflationary pressure in the construction industry.”
The Producer Price Index (PPI) for final demand jumped by 1.0% in July, the Bureau of Labor Statistics reported.
“On an unadjusted basis, the final demand index moved up 7.8 percent for the 12 months ended in July, the largest advance since 12-month data were first calculated in November 2010,” the BLS reported.
Prices have continued to surge for key construction metals, including steel and aluminum. The AGCA noted the PPI for steel mill products more than doubled from July 2020 to July 2021, gaining by 108.6%.
Meanwhile, the association’s officials called for the removal of existing tariffs on steel and aluminum.
“These tariffs and quotas are artificially inflating the cost of many key materials and doing more damage to the economy than help,” CEO Stephen E. Sandherr said. “Leaving these measures in place will undermine the broader benefits of the bipartisan new infrastructure measure the House should be passing.”
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