U.S. Building Permits Up

U.S. Building Permits Up

By Haley McAdams 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's the highest since October 2008, a few months before the first signs of industry recovery appeared.

The construction sector, especially among contractors who have already finished their contractors continuing education and are active in the field, is understandably encouraged by the news, which affirms the trend in other sectors that point to an economic recovery.

"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. Meanwhile, 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 forwardlooking."

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.

IndustrialInstitute.com provides contractor continuing education programs to a construction sector that is now seeing not just an economic recovery but an industry recovery as well.