I am compelled to borrow a line from "The Big Lebowski" this week because my outlook for activity levels in the residential construction sector contains "a lotta ins, lotta outs, lotta what-have-yous."
I will start with the basics and then try to explain some of the nuances that could be significant for suppliers of plastic building materials.
According to the Census Bureau, the total number of new houses started in June was 117,500. This figure was slightly below the total for May, but it was 5 percent stronger when compared with June 2018. This was the greatest number of new starts in the month of June since 2007.
But one month does not make a trend, so we need to step back to gain more perspective. The total number of new houses started in the second quarter was strong by recent historical standards, but it was slightly below the total from last year. For the year to date, the total for the first six months of 2019 is still 4 percent lower than the comparable period in 2018.
So, the totals for both the month of June and the crucial second quarter were good, but the near-term trend in the data remained flat-to-down.
I expect this sideways trend to continue through the second half of this year. My latest forecast calls for an annual total of 1.25 million starts in 2019. This is just a whisker below the total from 2018, and this would represent the first annual decline in the overall total in the past 10 years.
But the difference between last year's total and my forecast for this year is so small that a slight increase in the total for 2019 is well within the range of the forecast error. If we do manage to finish this year with a gain, then it will mark the 10th consecutive annual increase in total U.S. housing starts.
The small changes in the overall data this year mask greater variances in the data from the four census regions. There are also large divergences in the growth rates for single-family and multifamily units. These diverging growth rates stem from the long-term trends in both the locations and the types of units that consumers are demanding.