What is it?
- Building Permits refer to the approvals given by a local jurisdictions before the construction of a new or existing building can legally occur.
- Not all areas of the United States require a permit for construction.
Who Reports It?
Building Permits report is released by the U.S. Census Bureau on a monthly basis.
How it is Generated?
- The Building Permits report gathers the data on all new construction permissions granted for residential buildings, housing units, commercial buildings, and warehouses within a specific time period.
- The Bureau conducts a survey among 9,000 permit issuers and publishes the data on the 18th working day following the end of the focused month. It also performs an annual survey among 11,000 permit-issuing authorities.
- It may take three months to establish an underlying trend for building permit authorizations, six months for total starts, and six months for total completions
Why it is important?
- Since all related factors associated with the construction of a building are important economic activities (for example, financing and employment), the building permit report can give a major hint as to the state of the economy in the near future.
- A higher than expected number should be taken as positive to the USD, while a lower than expected number as negative.
Based on the result, we can tell that the Homebuilder’s Stock like Lennar(LEN), DR Horton(DHI), PulteGroup(PHI), and MDC Holding(MDC), etc. will have some movement, as it will show the future activities of these companies in the form of new build initiatives.
Additionally rising numbers of building permits means more construction workers are needed, which could lower the unemployment rate, and could also help lift average wages. In addition, all new homes need to be outfitted with appliances, so a rising number of building permits means appliance and furniture makers should be doing quite well for months to come as the new homeowners’ purchase couches, refrigerators, washing machines and the like for their new home.