Some encouraging stats on homebuilding caught my attention. Im always up for good news!
According to Bloomberg Industries, for the first time in half a decade, the industry group of 13 publicly traded homebuilding companies showed a third-quarter profit. Karen Weise gives us some examples (Ready or Not, Homebuilders Are Back Bloomberg Businessweek 10/8/1210/14/12, pp. 4950):
D.R. Horton, which builds the most homes in the U.S., reported operating income of $76 million in the period, up almost 50 percent from a year earlier. On Aug. 22, Toll announced third-quarter net income of $61.6 million, up 46 percent from the previous year. On Sept. 21, KB Home, which targets first-time buyers, reported quarterly earnings of $3.3 millionits first third-quarter profit since 2006. (p. 49)
Do we still have a long way to go? Certainly. Nevertheless, many analysts see this upturn as the beginning of a housing recovery. It may move slowly and tentatively. Homebuilders will still have to throttle hiring to meet demand very carefully. But at least it is the first clear sign of a positive direction.
This kind of an event tends to encourage other sectors. Employers who are on the verge of hiring new employees factor this sort of data into their decisions. With many companies sitting on a lot of cash, this all bodes well for the economy.
Lets hope it continues!
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