Blog

By Mish Shedlock of Mishtalk

Interest rates are too high for many projects to start. Some started projects are in trouble. Let’s discuss the ramifications.

The Wall Street Journal reports Developers Sit on Empty Lots After Historic Apartment Boom

Housing Starts vs Completions Looks Ominous for the Economy

On May 16, 2024, I commented Housing Starts vs Completions Looks Ominous for the Economy

Starts Minus Completions

Whether it’s all completions or just multi-family that matters the most, it doesn’t look very good either way.

Economic Ramifications

• Slowdown in construction employment.
• Slowdown in loans.
• Writeoffs on struggling projects. The WSJ mentioned several. There will be many.
• Apartment construction loans will add to the misery of regional banks suffering on commercial real estate loans.
• Huge slowdown in durable goods needs coming up: Appliances, furniture, light fixtures, etc.

This is happening as a major slowdown in EVs is also underway.

ISM Manufacturing New Orders and Backlogs in Steep Contraction

Yesterday, I noted ISM Manufacturing New Orders and Backlogs in Steep Contraction

Order backlogs have plunged. New orders are sinking. This will impact employment. The economy is now struggling on multiple fronts simultaneously.