U.S. Building Permits Increase Along With Construction Jobs

AUSTIN, TX, May 04, 2012 (Press-News.org) Builders generated 5 percent more permits in February this year to construct single-family homes and apartments, bumping up the annual rate to a seasonally adjusted 717,000 permits, according to the Commerce Department. The figure, to be sure, is just half the rate considered fully healthy by economists, but it is the highest since October 2008, a few months before the first signs of industry recovery appeared.

The construction industry, particularly the contractors who already have a contractors continuing education, is encouraged by the news, which affirms the trend in other sectors that an economic recovery is underway.

"This report is one of the more encouraging new construction reports we have seen in the last four years," said Patrick Newport, an economist with IHS Global Insight.

The increase in the volume of permits indicates that builders are growing more confident in the resolve of home buyers to purchase a house in the next few months. The seasonally adjusted rate of 698,000 housing starts, which presents a slightly different measure from housing permits, dropped from January's revised level of 706,000, which was also the highest since October 2008.

"The key numbers in this report are the housing permits not the starts," Newport pointed out. "The permits are better measured than starts, are less influenced by weather and are forward-looking."
Newport predicted that 2012 should be a better year for construction of homes than last year. He projected 745,000 homes will be started, better than the 611,000 in 2011. He noted that about two-thirds of the construction starts will likely be apartments and condos.

The construction industry, meanwhile, shed 7,000 jobs between February and March after jettisoning 6,000 jobs in January, according to an analysis by the Associated General Contractors of America (AGC). However, the total number of jobs generated by the industry in March 2012 improved on the March 2011 total.

"Both the small monthly change and the March-to-March gain of 55,000 jobs, or one percent, are consistent with the uneven, tentative recovery that contractors have been reporting nationwide," observed Ken Simonson, AGC's chief economist.

Simonson noted that March was the seventh consecutive month that construction employment had posted a higher total than the same month of the previous year.

"Multifamily, manufacturing, distribution, and energy-related construction are booming," Simonson revealed. "In addition, private hospital and university work are starting to improve, but public construction is declining, while single-family homebuilding, office and retail work are largely limited to remodeling jobs."

Simonson also said the March construction unemployment rate was 17.2 percent, about twice the national unemployment rate. He was quick to point out though that the industry rate was actually an improvement, having come down from 20 percent in March 2011 and 24.9 per cent in March 2010.

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