No region was spared in the US as the Commerce Department announced that the sector of home construction touched the lowest levels since 2015. In the last 5 years, there hasn’t been a more brutal decline than the recent in April 2020, when the home construction dropped over -30% on an annual level. Construction of single-family homes also dropped by over -25%. In the meantime, unemployment is set at 14.7%, which is the highest rate since the Great Depression.
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A Steep Decline in Home Construction Activity
Activity in home construction dropped by over -30% as reported concluded with April 2020, which is the steepest decline in the sector in the last five years. Some home construction projects were delayed or completely canceled by project owners and a part of these projects were canceled due to the lack of funds, labor, or materials. The unemployment t rate in the sector is on the rise. The level of decline is steeper than expected although economists predicted the overall drop in activity in the sector of home construction. The monthly declines in activity in the past two months also broke the negative records.
Homes Left Half-Built Amidst the Crisis
As reported by the sector of commerce, there is an 8.1% drop in the completion of homes as a part of the recent decline in activity. The report signifies an increased number of half-built homes that are left on hold in the following period. A great part of the latest decline was attributed to the COVID-19 outbreak, which accelerated the overall decline in construction activity due to halts and project delays. The industry is also lacking professional labor, which is why a part of home construction projects are placed on hold.
Will the Slump in Construction Continue?
The declines in activity in the sector of construction and subsectors are likely to continue in the next following months, based on the decline in building permits. The decline in building permits dropped by over -20%, touching an annual rate of 1.07 million.
