Category Archives: Construction

U.S. Construction Industry Outlook Weak On Challenging Operating Conditions

In this CreditMatters TV segment, I describe the influence the challenging economic conditions will have on the overall U.S. construction industry, as well as the U.S. building products and materials sector.  Standard & Poor’s baseline assumption is that 2012 construction will roughly mirror 2011 activity with downside risks that include a 40% probability of a […]

When will housing start to contribute to the economic recovery?

The answer, of course, is anyone’s guess.  But next week we start another round of updates to monthly US housing data beginning Tuesday when the Census Bureau releases August 2011 housing starts statistics. The market will be looking for any indication that housing is finally rebounding, simply stabilizing at recent lows, or falling deeper into a […]

Housing: A plus or minus for the economy?

Questions from reporters over the last week, since the S&P/Case-Shiller Home Price Indices were reported on August 30th, were bearish.  One slightly positive comment was that housing is doing better than the stock market. Another attempt at optimism came from a journalist who wanted (or his editor wanted) an article that now is a good […]

Home remodeling faces soft demand

Takeaway: The remodeling market lacks momentum for large spending upgrades. Here are my views on the home remodeling market and trends. No question, still very weak. Home remodeling activity in the first quarter of 2011 was less than 50% of where it was in the first quarter of 2008, right before the sharp downturn in […]

Sustainability taking roots in the housing market

Takeaway: Sustainability is seen as an important driver for homebuilders. Environmental sustainability, in the housing sense, means a new way of driving cost savings with energy conservation and appealing to the eco-friendly lifestyles of younger homebuyers or those going green. In the Green Outlook 2011 report published by McGraw-Hill Construction, government actions – including legislation […]

Homebuilders look elsewhere to make money

Takeaway: Disappointing new home sales is leading builders to diversify.  In the past week, government data on housing starts and permits were not anything to get excited about. Moreover, there were little signs the housing market is any closer to a recovery. At best, we see housing starts flat to up low single-digits in 2011 […]

Going Green at the S&P Housing Summit

Smog-eating tiles mean that roofs never have to go hungry– and other words of wisdom from the S&P Housing Summit green panel There’s no mistaking it. Builders see green building as a market differentiator. As we heard yesterday from Jeff Mezger, president and CEO of KB Home, during Standard & Poor’s Housing Summit in NYC, […]

Green has been a silver lining for home builders, but more is needed

The green building market has made all the difference during the downturn in new construction. Despite the decrease in new construction starts, green homes have increased in share—and in value, to be 16% of the market (up from 10% in 2008). Furthermore, in a recent study of builders attending the NAHB’s Green Home Building Conference, […]

Homebuilders outlook: glass half full or half empty?

In the past week, there were some positive news releases for the housing market and homebuilders. The government released its April data on new residential sales, and Toll Brothers (TOL 21 ****) posted favorable results for its fiscal second quarter. On May 24, the government put out some of the best new single-family home sales […]

The chicken or the egg? Isn’t housing supposed to lead the recovery?

In most recent economic recoveries, residential construction has led the general economic recovery.  Home purchases are very sensitive to interest rates, which tend to be their lowest at the end of a recession. Consequently, interest sensitive purchases, such as homes and automobiles, are the first to rebound at the start of a recovery. This time […]

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