Each Monday, we'll let you know what's coming in the week ahead, including important residential and commercial report releases, as well as our own feature articles.
Homebuilder confidence report — Feb. 16
The National Association of Home Builders/Wells Fargo Housing Market Index will be released on Tuesday, Feb. 16. Last month, the NAHB announced the index held steady at 60 from December to January. Regional three-month moving averages showed declines in all four regions, with the Northeast, Midwest and West posting one-point declines and the South falling two points.
NAHB Chief Economist David Crowe said January's index was in line with the NAHB's longstanding forecast for modest growth in housing in the face of an encouraging economic outlook.
As the first in the string of February housing market reports, the builder confidence index will signal how the residential industry views current and future prospects.
Construction equipment safety feature article — Feb. 16
Keeping the public safe in the midst of a construction boom is a difficult task for cities and construction companies. Building operations sometimes necessitate using potentially dangerous equipment in high-traffic or urban areas. Most recently, a construction crane collapsed in Manhattan, killing one pedestrian and injuring three others. According to reports, the crawler crane fell over as it was being lowered in advance of a coming storm.
As a result of the incident, Mayor Bill de Blasio said the city is implementing a four-point construction crane safety plan, which includes new restrictions on crawler cranes during windy conditions, double fines for equipment operators who don't follow safety requirements, increased protection for pedestrians near crane sites and increased notification to buildings located near cranes. He also announced the city will quadruple penalties for serious construction site safety violations, mandate new supervision at construction sites and start a safety sweep of more than 1,500 work sites throughout New York.
In our feature article on Tuesday, Feb. 16, we will look at the potential risks that construction equipment can pose to the public and to employees, as well as what happens next in the investigation, how crane operators can minimize their risk and how the incident will affect the way New York City and other cities look at the risk of having cranes operate in high density areas.
Producer Price Index — Feb. 17
The monthly Producer Price Index report from the Bureau of Labor Statistics will be released on Wednesday, Feb. 17. That afternoon, the Associated Builders and Contractors will offer their take on the data, and we'll cover both reports in a combined story.
Last month, construction material prices fell 1.2% between November and December and 4% year-over-year. December marked the sixth-consecutive month of declines in construction industry inputs in the Producer Price Index.
The continued slide in material prices was largely due to "global deflationary forces that have become increasingly apparent," ABC Chief Economist Anirban Basu said in a release. Basu was referring to the World Bank's prediction that the global economy will grow by less than 3% this year, below historic standards. A significant portion of that weak result is due to struggling economies in the emerging world, according to Basu.
Will the six-month streak of monthly price decreases continue this month, or will material prices rebound?
Housing starts data — Feb. 17
The Commerce Department will release housing starts data for December on Wednesday, Feb. 17. Last month, the department announced housing starts dipped 2.5% between November and December to a seasonally adjusted annual rate of 1.15 million. Single-family starts, which represent two-thirds of the residential market, fell 3.3%, while multifamily fell 1%.
Due to the unseasonably warm December weather, and the addition of 45,000 construction jobs in December, most industry experts expected housing starts to increase. The decline in starts was especially disappointing given that November saw a 10.5% increase in starts.
Will Wednesday's results offer positive news for the housing market after a disappointing report last month?
AIA billings index — Feb. 17
The American Institute of Architects will release its Architectural Billings Index on Wednesday, Jan. 20. Last month, the AIA reported the index rebounded to 50.9 in December, up from 49.3 in November. The December score indicated a slight increase in demand for design services, as any score above 50 indicates an increase in billings.
AIA Chief Economist Kermit Baker said architecture firms have been experiencing fluctuating business conditions for the last several years but that overall, "ABI scores for 2015 averaged just below the strong showing in 2014, which points to another healthy year for construction this year."
The ABI is a significant report for the commercial construction industry, as it serves as an indicator of future construction spending — with a lead time of about nine to 12 months — as design services lead to new commercial projects.
Shift from the suburbs feature article — Feb. 18
In a Zillow report this month, the real estate site's chief economist predicted that the current trend of homebuyer preferences toward more walkable, amenity-rich communities "will change some suburbs as we know them, and they'll start to feel more urban as buyers move further from city centers in search of affordable housing in communities that still feel urban."
Should the housing market prepare for a major shift away from traditional suburban living, or will all the hype eventually fade away with no significant changes to the market as a whole? And with those potential changes in housing, should commercial builders focus their attention on urban areas as well? In our feature article on Thursday, Feb. 18, we will explore whether there really is a a shift to urban areas and, if so, what age groups are driving that transition.
