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Weekly Roundup: Contractors’ future amid trade war, affordable housing EO, & more

Weekly Roundup: Contractors’ future amid trade war, affordable housing EO, & more

July 1, 2019

Construction Insider is a weekly roundup of the latest news and insights in construction.

Contractors face uncertain future amid US-China trade war

The continuing trade war between the US and China could lead to contractors spending more on Chinese goods as producer prices soar. Construction Dive

  • US President Donald Trump has recently threatened to increase the duties imposed on $300 billion worth of Chinese products, which according to law firm Clark Hill PLC represents almost everything China ships to the US.
  • While tariffs imply an increase in prices, there are still no quantifiable data that measure the exact effect of the trade war on the construction industry.
  • Some of the goods that could be affected by a blanket imposition of duties on Chinese products include chain saws, tower cranes, boilers, and tarpaulins.

Residential construction weakens effect on US GDP growth

Annual level of US housing starts has declined for the first time in 10 years, nagging worries among analysts because new home construction used to be the driving force behind the growth of US and Canada GDP. ConstructConnect

  • A -5.5% decrease in new home construction was observed in May, the first declining value since 2009.
  • Before the decline, residential construction has been sustaining the growth of the US and Canada GDP. The Federal Reserve is aware of the recent housing starts decline and its correlation with the country’s GDP.
  • The monthly US seasonal adjusted at an annual rate value for residential construction starts has been stuck at around 1.3 million units for several years. Earlier predictions that it should currently sit at 1.6 million units.

Trump approves EO on affordable housing

US President Donald Trump has recently approved and signed an executive order that seeks to promote housing affordability. NAHB

  • The National Association of Home Builders (NAHB) has applauded Trump’s decision to make housing affordability a top priority.
  • Since homeownership has become a source of wealth for most US households, “the need to tackle ongoing affordability concerns is especially urgent,” says NAHB Chains Greg Ugalde in a statement.
  • NAHB studies say that regulations account for 25% of the price of a single-family home. One of the new EO’s goals is to evaluate and streamline existing housing regulatory requirements.