US DATA: Building Permits Bounce Modestly After Weak Patch
Jul-17 12:55
- Building permits were higher than expected in June at 1446k (cons 1400k) in June after an already known upward revised 1399k (initial 1386k).
- It saw permits rise 3.4% M/M, although it’s relatively tepid after three heavy declines worth more than 10% through Mar-May, leaving permits -3.1% Y/Y.
- The increase on the month was led by a spike in the typically volatile multi-unit sector (+15.6%) whereas single unit permits were -2.3%, a fifth consecutive monthly decline.
- This rolling over in single family permits has helped narrow what was an increasingly wide gap between the two - see chart - arguably of note with single unit home construction potentially having a higher multiplier to GDP than each unit in a multi-unit setting.
- Actual starts meanwhile were also higher than expected at 1353k (cons 1300k) after an upward revised 1314k (initial 1277k).
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US DATA: Empire Survey Shows Improving Manufacturing Optimism At End-Q2
Jun-17 12:51
The NY Fed's Empire State Manufacturing index came in a little stronger than expected in June at -6.0 (-10.0 expected, -15.6 prior). This was the biggest monthly increase since November 2023, to the least-negative reading since February 2024.
- The Empire survey, while historically volatile, on balance represented a positive start to June's round of regional Fed manufacturing readings. While activity continues to contract, the survey provided signals that pronounced 2Q weakness may have represented a trough in activity in New York State for now.
- The positive signals included: Prices Paid slipped to the lowest since January (24.5) after four relatively elevated months, with prices received dipping slightly, suggesting softening inflation pressures. New Orders jumped by 15.5 points to -1.0, the best reading since July 2023, Shipments turned positive after 3 months of contractions, and expectations for activity 6 months ahead rose by 15.6 points to 30.1, the highest since March 2022.
- On the other hand, some indicators in the survey were softer: hiring remained weak (the number of employees index slipped 2.3 points to -8.7, near the post-pandemic lows), while capex expectations remained 2.0 for a 2nd consecutive month, both joint-lowest since May 2023 and among the weakest readings outside of a declared recession.
- Supply availability, which was available in this report for the first time, was -1.0, indicating little change (this was firmly negative in the backdated series through early 2022 amid global supply chain problems).
CANADA DATA: Foreigners Buy Most Canadian Securities In 2Y In April
Jun-17 12:44
- Foreigners bought net CAD41B of Canadian securities in April after investing CAD14.4B in March. The April increase was led by debt securities at CAD35B.
- Canadian investment in foreign securities to CAD2.5M after record CAD36 billion investment in March.
- Canadian purchases in foreign debt, primarily US gov bonds, was offset by divestment in foreign shares.
CANADA DATA: Canada May Housing Starts +10% MOM To 264.5K Units Led By Multis
Jun-17 12:41
- Canada 6M moving average +3.8% to 247.8K units, the fastest increase since Sept 2023; starts were -2.2% in April.
- Starts in urban areas +39% YOY; increase driven by multi-unit starts +49% and single-detached starts also rose +6%.
- "While this is good news for housing supply, we do expect downward pressure on starts through the rest of 2024," said Bob Dugan, CMHC's chief economist.
- Government announced CAD8.5B of spending on housing over 5Y in the 2024 federal budget. Some economists have noted the plan to build millions of new homes in coming years is far beyond the industry's current capacity.
