While There's Good News in Housing, Keep a Watchful Eye on the Future

March 1, 2013
Keep optimism over the good news from the housing industry in perspective, and remember that next year may prove more challenging.

Leaders need to be always aware of their surroundings and the potential impact on their organization.  Let’s take an example from current economic headlines.

I have noticed in the news lately a lot of good news about the housing industry, and the good news is deserved.  Single-family home construction in January posted a 5.6% from December.  The increase is slightly steeper than normal, and therefore very encouraging and good news for the economy.  The seasonal decline since the July high, at -24.8%, is milder than normal, so clearly there is no pending crisis in this important industry segment.

There are two things to keep in mind in the midst of all this good news.  One, a typical length of rise in the annual data trend means that the recovery in single-family housing starts will end in August 2013.  The massive stimulus spending by the Federal Reserve Board could result in a longer-than-normal rise.

Second, the 12/12 rate-of-change for single-family home construction has established a tentative high in December with more decline indicated by internal factors.  The 12/12 decline is likely an early indication of a late-2013 end to this leg of the housing recovery and a leading indicator to the slow-down we are projecting for the US economy later this year.  There is a growing optimism in the media concerning the coming year; balance that off with a tentative indication that clouds are forming on the economic horizon.

About the Author

Alan Beaulieu Blog | President

One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. ITR predicts future economic trends with 94.7% accuracy rate and 60 years of correct calls. In his keynotes, Alan delivers clear, comprehensive action plans and tools for capitalizing on business cycle fluctuations and outperforming your competition--whether the economy is moving up, down, or in a recession.

Since 1990, he has been consulting with companies throughout the US, Europe, and Asia on how to forecast, plan, and increase their profits based on business cycle trend analysis. Alan is also the Senior Economic Advisor to NAW, Contributing Editor for INDUSTRYWEEK, and the Chief Economist for HARDI.

Alan is co-author, along with his brother Brian, of the book MAKE YOUR MOVE, and has written numerous articles on economic analysis. He makes up to 150 appearances each year, and his keynotes and seminars have helped thousands of business owners and executives capitalize on emerging trends. 

Prior to joining ITR Economics, Alan was a principal in a steel fabrication company and also in a software development company.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!