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Archive for Thursday, February 18, 1999

HOUSE CONSTRUCTION CONTINUES TO BOOM

February 18, 1999

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— The housing boom just keeps going and going and going. Defying economists' predictions and icy weather in the Northeast and Midwest, builders in January started construction on new houses and apartments at the fastest seasonally adjusted pace in 12 years.

But a separate report on Wednesday showed manufacturing stayed stuck in the doldrums last month.

Housing starts jumped 3.8 percent to a seasonally adjusted annual rate of 1.8 million, the most since December 1986, the Commerce Department said.

"The only reason housing starts weren't even higher is builders are having trouble ... finding qualified labor and they're having to stretch out their construction schedules," said economist Michael Carliner of the National Association of Home Builders.

Last year, builders started 1.62 million units, an 11-year high, and economists had expected January to mark the start of a modest decline during 1999.

But starts of single-family homes rose 1.2 percent to an annual rate of 1.39 million, a 15-year high.

In contrast, production at the nation's factories, mines and utilities was unchanged in January after a lackluster 1998, the Federal Reserve said, reflecting the world economic slump that cut U.S. export sales and brought a flood of cheap imports.

Just at factories, output edged a seasonally adjusted 0.1 percent higher. Gains in the output of autos, computers, semiconductors, lumber and furniture offset declines for aircraft, steel, clothing and tobacco.

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