US housing permits show slow growth in January, uncertain PVC market outlook

The recent data on US housing permits in January indicates a sluggish start to new housing construction in early 2025, with annual permit and start figures trailing behind the previous year. Market expectations for the domestic PVC industry also remained flat in January, with participants anticipating only modest increases in consumption for the year.

According to market insiders, PVC demand primarily revolved around inventory rebuilding rather than end-use in construction. Many PVC buyers did not foresee immediate use of replenished inventories, with some not anticipating increased demand until the latter half of the year. The slow start to construction activity in January seems to support these expectations, as February demand already seems to have plateaued for some PVC buyers. January’s contract prices settled at 57.5¢/lb, remaining unchanged from the previous month due to underlying demand uncertainties among buyers.

The latest data from the US Census Bureau and the Department for Housing and Urban Development revealed that privately-owned housing permits were at a seasonally-adjusted annual rate of 1.483 million units in January. Although this figure was a slight improvement from December, it was 1.7% lower than the same period the previous year. If this trend continues throughout the first quarter, it could potentially lag behind the housing construction pace of the prior year during the early peak building season from spring to early summer.

In January, single-family permits remained steady at 996,000 units, showing no change from December after a consecutive increase in the preceding months. However, despite this recent uptrend, the figure was still 3.4% below the previous year’s rate. Housing starts in January also saw a decline, standing at a seasonally-adjusted annual rate of 1.366 million units, 9.8% lower than in December and 0.7% less than January 2024. Single-family starts were recorded at 993,000 units, reflecting an 8.4% decrease from December and a 1.8% drop from the previous year.

Overall, the slow start to new housing construction and subdued PVC market expectations in early 2025 signal a cautious approach to consumption and construction within these sectors. With uncertainties lingering about future demand and construction activity, industry participants are closely monitoring developments in these key areas to gauge the trajectory of the market in the coming months.