Housing starts show economic improvement
Housing starts offer a good way to assess economic confidence, as they give us an indication as to where we are in the economic cycle. After a rough January, homebuilders managed to find new projects in February, suggesting Alberta is starting to emerge from two years of recession. Last month saw home builders start work on close to 27,000 homes; that's a 40 per cent increase from the start of the year and a 17 per cent increase from the same month a year earlier. These figures are seasonally adjusted and reported at annualized rates-that is, as the number of homes that would be built over the course of a full year if the same pace of activity were maintained for 12 months. From February of this year to March of last, a total of 24,524 were built (based on the average of the 12 months). That's down from 34,156 one year earlier (-28.2 per cent). While February's jump in housing starts is positive news, it's important to not pull too many conclusions from a single monthly increase. Alberta continues to see higher levels of unabsorbed housing (houses that have no binding agreement to rent or sell) prompted by outmigration from the province. The province's economy will only modestly recover this year and Alberta's unemployment rate will lag in that recovery. Collectively, these factors suggest Albertans are unlikely to push new housing demand back up to record highs and may actually keep a lid on housing starts this year.
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