Construction Data

Construction indicators constitute a significant group that is included in the calculation of the GDP of the United States. Moreover, housing has traditionally been the engine that pulled the U.S. economy out of recessions as it did after World War II. These indicators are classified into three major categories:

1. housing starts and permits
2. new and existing one-family home sales; and
3. construction spending.

Construction indicators are cyclical and very sensitive to the level of interest rates (and consequently mortgage rates) and the level of disposable income. Low interest rates alone may not be able to generate a high demand for housing, though. As the situation in the early 1990s demonstrated, despite historically low mortgage rates in the United States, housing increased only marginally, as a result of the lack of job security in a weak economy. For example, in spite of the 2000 – 2001 recession, the cost of houses in California hardly decreased. Housing starts between one and a half and two million units reflect a strong economy, whereas a figure of approximately one million units suggests that the economy is in recession.

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Ditulis oleh William Perkasa pada tanggal Wednesday, February 18, 2009