PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Good News on Housing, Good News for Small Business

By at 28 November, 2017, 4:00 pm

by Raymond J. Keating-

New housing sales were up in a big way in October.

The U.S. Census Bureau reported on November 27 that sales of new single-family homes registered a seasonally adjusted annual rate of 685,000 in October, up by 6.2 percent over the September level and by 18.7 percent over a year earlier.

Sales in October 2017 also were the highest since October 2007. Also, dating back to 1963, the annualized average comes in at 651,000. The October 2017 level of 685,000 is the first time the average was exceeded since, once again, October 2007.

 

These are good signs that the march out of the housing depression that lasted from mid-2005 to late 2011 continues in the right direction, and could be picking up some steam.

That’s welcome news on assorted fronts. For example, private residential investment peaked in the third quarter of 2008, and has yet to climb back to that level. In fact, it’s still down by a third. However, the decline in residential investment was so bad that it actually has risen, in real terms, by 59 percent since the third quarter of 2010.

For good measure, it’s positive for the small businesses that dominate the single-family housing construction industry. Consider that 93 percent of employer firms in this sector have less than 10 employees, and 98 percent less than 20 workers.

Of course, looking ahead, the best scenario for small businesses not only in the construction industry but across sectors would be for economic growth to continue to accelerate. That, in large part, depends upon Washington getting policymaking pointed in the right direction – from implementing pro-growth tax changes to providing broad regulatory relief.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

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