WAR & WEATHER RAIN ON GROWTH

As you probably have noticed in “Electrostats” over the past few months, the housing market has been one of the few rays of sunshine in a dismal construction market.

Unfortunately, it sometimes even rains on that parade. According to the U.S. Commerce Department and the National Association of Home Builders (NAHB), Washington, D.C., unusually cold and wet weather across much of the nation, economic and job market weakness and concerns over the war in Iraq contributed to a decline in new housing starts in February. The Commerce Department reported an 11 percent decline from January's seasonally adjusted annual pace of 1.82 million housing starts to a still-solid 1.62 million-unit pace in February. The entire slowdown in February occurred in the single-family sector, where starts slowed 13.7 percent to a seasonally adjusted annual rate of 1.3 million units.

However, NAHB Chief Economist David Seiders said the fundamentals of the housing market remain solid.

“Given the strong permit numbers we are seeing, the tight inventory situation, healthy house-price performance and especially the favorable interest-rate picture, home builders are in good position to pick up the pace of housing production as today's economic and political uncertainties head toward resolution,” he said. “We're still looking at a year-end housing production figure very close to last year's exceptional 1.7 million units.”

On the industrial side, two key indicators quietly edged up in January. Electrical manufacturers' shipments increased three percent in January over December 2002 to $2.6 billion, and electrical manufacturers' new orders increased 2.4 percent to $ 2.61 billion.