Housing Permits Continue to Improve
There were 105,000 housing permits filed in April 2015. This was the most housing permits filed in a single month since June 2008 and the second most since October 2007. This was an increase of 6.0% compared with one year ago. This was the fourth time in five months that the month-over-month rate of growth exceeded 5.8%. Housing permits seem to have bottomed as the quarterly rate of change has been faster than the annual rate of change two of 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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