The reality of global supply chain issues are now showing up in the latest data for U.S. homebuilding, says BMO Capital Markets.
In a new report, BMO said that U.S. housing starts unexpectedly fell last month, declining by 1.6% to their lowest level since April.
At the same time, the data for August was revised down substantially from an initial reading of a 3.9% gain to just 1.2%.
“And, just to make sure this was a consistently bad result, building permits took a 7.7% dive,” BMO noted, with permits at their lowest mark since August 2020.
The weakness throughout the sector doesn’t reflect a lack of demand. Rather, it’s a combination of shortages in both building materials and labour.
“Businesses are struggling to meet demands put on them,” BMO said.
“New housing is needed, given that the supply of existing homes is still historically low. But with all the constraints these days on this industry (at least it is not alone), there will be down months. And September was one of them,” it said.