Building Permits measure the number of new building permits issued by the national authorities over a set period of time. The indicator can be used to predict the well-being of the national economy.
United States Building Permits
1 168 000 new building permits have been received in the United States in May 2017. This number fluctuated between 500 000 and 2 500 000 per month since 1969. The Building Permits indicator has been on the rise since 2011, experiencing a dramatic decline in the period between 2006 and 2010. The average number of permits issued in the US each month since 1960 is equal to 1 356 800.
Why is it important?
Housing industry is one of the pillars of the American economy. Less housing permits mean less construction activity in the country. Real estate market is tightly connected to the economic conditions. When the national economy is standing on the verge of a crisis, a decline in the number of new house acquisitions can be expected. The indicator, therefore, can be used to predict the well-being of the American economy, which, in turn, affects the exchange rate of the USD.
Practical application
A higher than expected reading should be taken as bullish for the USD, while a lower than expected reading should be taken as bearish for the USD.
