Builder Confidence Continues Upward In August - 2:00pm

Builder Confidence Continues Upward In August - Full report here August 17, 2009 - Builder confidence in the market for newly built, single-family homes rose one point in August to its highest level in more than a year, according to the latest reading of the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. Building on a two-point gain in July, the HMI reached 18 this month, its highest point since June of 2008. “Home builder expectations have been buoyed by the success of the first-time home buyer tax credit and its anticipated boost to buying activity leading up to the Nov. 30 expiration date,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “The question is what happens after that – whether there will be enough momentum to keep us moving toward a recovery, particularly in light of significant headwinds such as the severe credit crunch for housing production loans and inappropriate appraisal practices that are scuttling a quarter of all new-home sales. Unless Congress and the Administration focus their attention on housing right now, this improvement may well be short-lived,” he said. “One very positive aspect of today’s report is the big gain registered in the component gauging home builders’ expectations for the next six months,” noted NAHB Chief Economist David Crowe. “This reflects anticipated sales stemming from the tax credit as well as recent signs that an economic recovery has begun. There is definitely a sense of hope among builders that the worst of the downturn is over and that a turning point is near at hand. Meaningful action by Congress could ensure that this upward momentum continues and that housing can help push the economy back onto solid ground.” NAHB is calling on Congress to extend the first-time home buyer tax credit for another year and to offer it to all income-eligible buyers. In addition, NAHB is urging Congress to help eliminate the credit crunch, correct faulty appraisal practices and expand Net Operating Loss tax provisions that can help avoid more layoffs. Each of these actions would generate thousands of new jobs and provide a much-needed boost to economic recovery. Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor. Two out of three of the HMI’s component indexes recorded substantial gains in August. The biggest boost, of 4 points, was registered by the index gauging sales expectations in the next six months, which rose to 30 this month. Meanwhile, the index gauging traffic of prospective buyers gained three points to 16 and the index gauging current sales conditions held unchanged at 16. Regionally, all but the South recorded HMI gains in August. The Northeast posted an 8-point gain to 24, the Midwest posted a two-point gain to 16, the West posted a three-point gain to 17 and the South posted a one-point decline to 18. EDITOR’S NOTE: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be accessed online at: www.nahb.org/hmi. More information on housing statistics is also available at: www.housingeconomics.com.

Empire State Manufacturing survey - 8:30am

Full report here For the first time in considerably more than a year, the Empire State Manufacturing Survey indicates that conditions for New York manufacturers have improved. The general business conditions index increased 13 points, to 12.1, its highest level since November of 2007. Although the inventories index remained well below zero, the new orders and shipments indexes rose to their highest levels in many months. The prices paid index was positive, while the prices received index continued to be negative. Employment indexes were much improved from their recent low levels, although they remained below zero. Future indexes generally rose from last month and conveyed optimism about the six-month outlook; the capital expenditures index rose to its highest level in over a year. In a series of supplementary questions (see Supplemental Report tab), manufacturers were asked to assess the degree to which certain business issues posed problems for their firms; the same questions had been asked in August 2008 and in earlier surveys. In the current survey, the cost of employee benefits was the issue most frequently identified as a major problem. A distant second was workers’ compensation, which was cited as a major problem somewhat more often than in last year’s survey, but less often than in 2007. Last year’s most widely cited concern, the cost of resources, emerged as much less of a problem in this year’s survey, ranking third. Manufacturers See Improving Conditions In August, after more than a year of negative readings, the general business conditions index rose into positive territory and reached its highest level since November 2007—a clear indication that, on balance, business conditions had improved for New York State manufacturers. Thirty percent of respondents said that conditions had improved over the month, while 18 percent said that conditions had deteriorated. The new orders index rose 8 points to 13.4, and the shipments index rose 3 points to 14.1. Both of these indexes were at their highest levels in more than a year. The unfilled orders index rose slightly, to -9.6. The delivery time index, at -10.6, hovered near last month’s level. The inventories index rose 14 points from a very low level in July, but remained well below zero at -22.3. Employment Indexes, though Negative, Rise After turning positive in July, the prices paid index rose a few points to 13.8. The prices received index remained below zero, falling 4 points from last month, to -12.8. Employment indexes were much improved, although they remained negative. Posting a sixth consecutive monthly increase, the index for number of employees rose 13 points to -7.5, its highest level since October of last year. Similarly, the average workweek index climbed 13 points to -6.4. Conditions Expected to Improve Further Future indexes rose significantly in August, conveying an expectation that conditions would continue to improve in the months ahead. The future general business conditions index advanced 14 points to 48.2, with 62 percent of respondents expecting conditions to be better in six months. The future new orders index rose 15 points to 46.0, and the future shipments index rose 4 points to 40.5. The future prices paid index climbed 6 points to 31.9, its highest level since late last year, while the future prices received index rose 11 points to enter positive territory for the first time since January. Future employment indexes were positive and higher than in July, suggesting that employment is expected to rise. The capital expenditures index advanced 16 points to 18.1, its highest level in over a year, and the technology spending index rose 14 points to 14.9. More at link, including charts