Housing Permits are Turning Up
There were 90,900 housing permits filed in March 2015. This was an increase of 7.6% compared with one year ago. This was the third time in four months that the month-over-month rate of growth exceeded 7.5%. This was significantly better growth than at any time since 2013. Housing permits seem to have bottomed as the annual rate of change has been accelerating growth the last three months. This is positive for the plastics industry in particular.
However, the 10-year treasury rate appears to be entering a trend of rising rates compared with one year ago. This indicates that housing permits could see their peak rate of growth later this year. Changes in the interest rate lead changes in housing permits and construction spending by about 12 months on average.
We use housing permits as an early leading indicator for the following industries: appliances; custom processors; furniture; hardware; HVAC; off-road/construction machinery; petrochemical processors; plastics; plastic/rubber products; pumps/valves/plumbing products; textiles/clothing/leather goods; and wood/paper products.
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