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Frequently Asked Questions on Construction Statistics

 

1) What construction statistics are available from the Census Bureau?

2) What are economic indicators? Which indicators do we produce in MCD? Are they leading or lagging economic indicators?

3) How are these economic indicators useful? How do economists use them?

4) When do the monthly press releases/reports come out? What about the quarterly data series?

5) Do you know how many houses there are in the U.S./my state/my county?

6) Why doesn't the Census produce construction statistics for Avoca, PA (or my home town)?

7) What percentage of the economy does construction represent?

8) I want to get the "home price deflator" for use in court/in insurance claims. Who do I call?

9) I saw a report on the news that there were over a million houses started last month. Come on, a million!? What's that about?

10) I keep hearing about the "revised" statistics. Why do you revise the statistics which you've already published?

11) What other economic indicators are produced at the Census Bureau?

12) Why do the new single family houses sold numbers consistently turn out so much lower than the single family houses started or completed?



1) What construction statistics are available from the Census Bureau?

The Census Bureau collects, tabulates, and publishes monthly statistics on Housing Starts, Building Permits, New One-Family Houses Sold, Housing Completions, Manufactured Home Placements, and Dollar Value of Construction Put in Place.

We also produce quarterly estimates of the Residential Construction in Selected Metropolitan Areas, Price Index of New One-Family Houses Sold, and the Dollars Spent on Residential Improvements and Repairs.

There are various annual supplements to these monthly and quarterly data series which are technically not separate data products. Generally they are more localized (geographically) or more detailed (tighter distribution ranges) versions of the same data provided in the monthly and quarterly series.

Every five years (years that end in "2" or "7") we conduct a Census of Construction Industries (CCI) as part of the Economic Censuses. The products of the CCI are a series of press releases and (paper) publications which are eventually released on CD ROM.


2) What are economic indicators? Which indicators do we produce in MCD? Are they leading or lagging economic indicators?

Economic indicators are statistical figures which are used to track the growth and decline of activity in specific segments of the economy over time.

MCD produces and releases several economic indicators to the public, including Housing Starts, Building Permits, New Single-Family Home Sales, Manufacturers' Shipments, Inventories and Orders (M3), and the Value of Construction Put in Place. These series can be used by themselves or in conjunction with other indicators. For example, figures from the Value of Construction Put in Place are used in the monthly computation of the U.S. Gross Domestic Product (GDP).

Housing Starts, Building Permits, New Single-Family Home Sales, and Manufacturers' Orders are considered leading economic indicators because they tend to increase or decrease before the economy/business cycle changes as a whole. (Business cycle refers to the sequence of expansion and recession periods of the economy over time.) For example, if building permits increase and residential construction is growing, you can expect an increase in demand for durable goods to follow, such as major appliances that will be placed in new homes. The increase in building permits foreshadows the increase in the demand for durable goods.

The Conference Board produces a monthly Composite Index of Leading Indicators which consists of 11 components. Three of these components are based on statistics produced in MCD. One is an index based on building permits data. The other 2 are based on M3 data; specifically manufacturers' new orders for consumer goods and materials, and the change in manufacturers' unfilled orders for durable goods. More information on the Composite Index of Leading Indicators and other indexes can be obtained by contacting BEA at (202) 606-5366.


3) How are these economic indicators useful? How do economists use them?

These indicators allow us to track activity in different segments of the economy. This information can be used to forecast future levels of activity.

Economists, fiscal and monetary policy makers, and other analysts use economic indicators to understand the overall behavior of the economy and the interaction between the construction and manufacturing industries and various other segments. Policy makers make decisions and create policies based on what the indicators reveal about where these segments are now and in what direction they may be heading. Construction companies can then take advantage of these forecasts to plan out their employment and supplies needs for the future.


4) When do the monthly press releases/reports come out?

In general, the press release schedule is as follows:

  • We issue the Housing Starts and Building Permits press release on the 12th workday of the following month (January's data on the 12th workday of February) at 8:30 a.m. Eastern time.
  • We issue the New One-Family Houses Sold press release on the 21st workday of the following month at 10:00 a.m. Eastern time.
  • We issue the Value of Construction Put in Place press release on the first workday of the second month after the survey month (January's data on the first workday of March) at 10:00 a.m. Eastern Time.
  • We issue the Housing Completions press release on the third workday of the second month after the survey month at 10:00 a.m. Eastern Time.

    These are the general rules. There are times when the Department of Commerce, of which the Bureau is part, will decide to move a press release up or back a day or two in order to avoid conflicts in scheduling with other press releases.

    It's important to remember that "work days" refers to work days for federal offices in Washington, DC (though the Census Bureau headquarters is physically located in Suitland, Maryland about one mile from the District.) Your local jurisdiction may celebrate George Washington's birthday as a legal holiday, but the federal government recognizes Presidents' Day. If they're not on the same day, your count of work days will be different than ours.

    Eastern time means EST or EDT, whichever is in effect in Washington DC on the release date.


    5) Do you know how many houses there are in the U.S./my state/my county?

    This is not actually a "construction" statistic, so we don't process the surveys and censuses that provide that data here in the Manufacturing and Construction Division. There are other groups in the Bureau collecting, tabulating, and publishing just such data on a regular basis.

    Once every ten years the Census Bureau conducts the Decennial Census of Population and Housing, as directed in the Constitution of the United States.

    We have information on the numbers of households, families, people per household, etc in the Population Division of the Bureau. You should direct queries on that data to the experts at (301) 457-2465. There are some data available for a variety of geographical breakdowns, and there are some data which are regularly updated between the decennial censuses.

    For questions relating to the numbers of existing housing units in the country during years between the decennial censuses, you'll need to contact the American Housing Survey (AHS) staff of the Housing and Household Economic Statistics (HHES) Division at (301) 457-3235. The AHS is conducted every two years (odd numbered years) and provides data on the housing units in the country. Regional, divisional, and some other geographic breakouts are available for some of the statistics.


    6) Why doesn't the Census produce construction statistics for Avoca, PA (or my home town)?

    We actually do produce tabulations showing the number of Building Permits issued in nearly every jurisdiction of the country that issues permits (including Avoca). Most of our other survey data are produced through sample surveys with data collection costs which would make it prohibitive for us to try to cover the entire country as well as we cover building permits. You can reach the Building Permits branch at (301) 457-1321. Of particular interest to many data users are the various diskettes (IBM compatible) of permit data which they produce for sale.

    The sample survey which produces Housing Starts, Sales and Completions statistics allows for the publication of data by Census Region. In addition quarterly data for selected metropolitan areas is produced. For more information on that series, call (301) 457-1321.


    7) What percentage of the economy does new construction represent?

    MCD's figures on the value of construction put in place are used in the formulation of the Gross Domestic Product (GDP), produced by the Bureau of Economic Analysis every quarter. For 1998, the value put in place was approximately $665.4 billion or 7.8% of the $8,511.0 billion GDP figure.


    8) I want to get the "home price deflator" for use in court/in insurance claims. Who do I call?

    There are several standards used for adjusting house prices when dealing with insurance companies, tax courts, etc. Some have been codified in law by local jurisdictions. Here in the Manufacturing and Construction Division we produce several numbers which are frequently used for such purposes. There are different technical merits of each which may or may not be considerations in legal matters.

    The quarterly Price Index of New One-Family Houses Sold is a measure of what it would cost to build a "typical" house in different time periods. The "typical" house is currently defined as the average house sold in 1992. It's a mathematical abstraction of the characteristics of new one-family houses sold in 1992. This "house" is about 8.0 percent attached, and about 4.9 percent detached in the Northeast region, 19.3 percent detached in the Midwest region, 39.3 percent detached in the South region, and 28.6 percent detached in the West region. That's because about 8.0 percent of the new one-family houses sold in 1992 were attached, 4.9 percent were detached houses in the Northeast, and so on. Other characteristics of the sales mix in 1992 are weighted within each of those 5 categories according to their share of the 1992 sales. The contribution that each characteristic made to the total sales price is computed through a logarithmic regression where the natural log of the sales price (including the value of the lot) is the dependent variable, and the independent variables include things like heating system categories, number of bathrooms, and the biggie, the natural log of the square feet of floor area. A description of the methodology used in the price index calculation is available by calling (301) 457-1321.

    There is also a houses under construction "price deflator" which is produced each month in MCD. This is used in estimating the value of construction put in place each month in real terms for our Current Construction series C30 reports entitled "Value of Construction Put-in-Place." The Construction Expenditures Branch utilizes over a dozen different construction price or cost indexes, though most of these are not for residential construction. You can reach the statisticians in Construction Expenditures Branch at (301) 457-1605.

    There are several other price deflators available from the statistical agencies of the U.S. Government. The Bureau of Economic Analysis produces an implicit price deflator for each category in the Gross Domestic Product. For more information on these figures, contact the Bureau of Economic Analysis.

    The Bureau of Labor Statistics produces the Consumer Price Index (CPI) which includes a shelter cost component. Their most recent CPI press release is available on the BLS web site.

    Outside the U.S. Federal government agencies there are a number of construction indexes produced by companies such as the American Appraisal Company. You can contact American Appraisal at 25 East Michigan Street Milwaukee WI 53202 (414) 271-7246. Another set of indexes comes from the Engineering News-Record. These are mainly cost indexes, and are available at a city level for 20 cities in the U.S. For more information on their data products, call (212) 512 2000.


    9) I saw a report on the news that there were over a million houses started last month. Come on, a million!? What's that about?

    The Census Bureau reports on construction activity typically include a number which is a "seasonally adjusted annual rate." In the case of housing starts, the seasonally adjusted annual rate (SAAR) for a particular month is often higher than one million houses.

    There is an "actual" number reported at the same time which doesn't get quite the in-depth press coverage that the SAAR gets. For the housing starts report, this is the estimate of the actual number of housing starts that took place in that particular month.

    The SAAR is calculated by removing the normal seasonal variation from the monthly data, as best we can, to produce a seasonally adjusted estimate for the month. That estimate is multiplied by 12 to produce an annual rate. The X-11 ARIMA process is used to detect and remove the seasonality from the original data. If you'd like more information on X-11, or its application to the Census Bureau's construction statistics data series, look at the January issue of the Housing Starts report. Publications are found from our home page under Publications (PDF). You can find the Housing Starts reports here. Appendix A in the January report will go into much greater detail.

    In general, economists like to look at the seasonally adjusted numbers to watch for a trend developing in the industry. If the numbers weren't adjusted for seasonality, and you noticed that the housing starts were higher in March than February, how would you know what to make of that? For reasons having to do with when it's easier to build because of the weather and when people are more likely to buy houses, you'd expect March starts almost always to be higher than February. Seasonal adjustment lets us compensate for the expected seasonal changes and be able to better measure real trends.


    10) I keep hearing about the "revised" statistics. Why do you revise the statistics which you've already published? Can't you publish the correct number the first time?


    Usually the preliminary or advance release, which gets the greatest press coverage, is based on fewer reports than we have available a month or two later. When the additional data are collected and processed, we are able to base an estimate on the greater number of responses

    .

    11) What other economic indicators are produced at the Census Bureau?

    Additional economic indicators produced in other areas at the Census Bureau include U.S. International Trade, Labor Force, Income, Poverty, Government Budget and Debt, Plant and Equipment Expenditures, and Retail Sales.


    12) Why do the new single family houses sold numbers consistently turn out so much lower than the single family houses started or completed?

    There are some significant differences in the units measured in those surveys. All new single family residential units are included in the starts and completions figures. This includes units being built for rent, those built by a contractor on an owner's land, and those built by an owner acting as his/her own contractor. There are also some units being built for condominium or co-op development which meet the definition of single family units.

    New home sales data include only the units which are built to be sold, where the purchase of the lot is included in the transaction.



    If there are other questions that you've always wanted to ask about our data, but didn't know where to get answers, let us know. We'll do our best to get the answer for you, and incorporate your question(s) in the updates of this document.


    U.S. Bureau of the Census
    Manufacturing and Construction Division
    Washington DC 20233-6900

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    Last revised: April 16, 2002