US housing weakens again

The above chart comes from Kevin Swift’s weekly report for the American Chemistry Council. Sadly, it paints a downbeat picture for the near-term outlook for the US chemical industry. It shows that US housing starts fell a further 0.6% in February, whilst building permits fell 7.8%.
Housing starts are now down 28% versus a year ago, and building permits are down 37%. In absolute terms, they are back to 1990 levels, and still falling. This is very bad news, as housing is a key market for the chemical industry, with each new home requiring $16k of chemicals.
The only bright spot for US producers is that they have been able to compensate for this domestic decline via increased exports. As I noted last week, the US $ is now back at 1971 levels on a trade-weighted basis. The report shows rail car loadings are now up 3.4% versus last year as a result. But I doubt that these levels of exports are sustainable. Asian and European markets are probably already slowing themselves, now the US has moved into recession.