Economic Watch: Home Starts Slow, Overall Optimism Remains

Nationwide housing starts fell 5.8% to a seasonally adjusted annual rate of 1.14 million units in August, according to newly released data from the Commerce Department on Tuesday, the latest disappointing economic indicator, but there are still feelings overall economic conditions are improving.

“After two months of gains, the housing market gave back a bit in August,” says Ed Brady, chairman of the National Association of Home Builders. “However, with builders reporting low inventory levels and rising confidence, we expect more consumers will return to the market in the months ahead.”

Both housing sectors posted production declines in August. Single-family housing starts fell 6% to a seasonally adjusted annual rate of 722,000 units while multifamily production declined 5.4% to 420,000 units.

“The August reading represents a one-month blip in what has been a long-term, gradual recovery,” says NAHB Chief Economist Robert Dietz. “On a year-over-year basis, single-family starts are up 9% while multifamily construction continues to level off at a solid level as that sector seeks to find a balance between supply and demand.”

Overall permit issuance, an indicator of future home building, edged 0.4% lower. Single-family permits rose 3.7% in August to a rate of 737,000 while multifamily permits dropped 7.2% to 402,000. Combined single- and multifamily starts increased in three of the four regions in August; the Northeast, Midwest and West; while the South posted an atypical decline.

The pullback in August housing starts, and particularly the weakness in single unit starts, has lowered expectations by the Royal Bank of Canada with it comes to third quarter residential investment, but there there are higher hopes in other economic sectors.

RBC Economist John Nye expects a modest 2% annualized decline rather than flat activity, although that would still represent an improvement on the nearly 8% annualized decline recorded in the prior quarter.

“We also look for ...Read the rest of this story

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Bringing Maintenance to the Truck

Lights, tires and the air system can all be inspected from a mobile maintenance truck at a customer's location. Photo: Transervice Lease Corp.

Fleets are constantly looking for ways to increase roll time of their trucks and trailers and cut down on CSA violations, says Jerry Bodkins, program manager at TA Truck Service OnSite. Mobile maintenance allows them to do that “without having to go through the logistical nightmare of going back to the shop and staffing technicians, which is not easy for anybody in this industry today,” he says.

There are economic advantages to fleets that have their own mobile maintenance trucks, because they do not have to invest in brick and mortar. Even if a fleet chooses to outsource mobile maintenance, it still can have economic advantages.

“With mobile service, we can reduce customer downtime for normal maintenance and repairs and get their trucks back up and running quickly,” explains Mike Besson, managing vice president, service and customer solutions for mega-dealer Rush Enterprises.

Taki Darakos, assistant vice president – Berkeley Division of Transervice Lease Corp., says transportation is a just-in-time business, and mobile maintenance allows fleets to operate with minimal disruptions or delays in their operations.

Mobile maintenance providers offer a range of services. Rush, for example, has two levels of preventive maintenance inspections: a 57-point one and a more comprehensive 105-point inspection, which includes changing oil and filters.

Transervice offers trailer PM service as well as working on lights, tires, air leaks, small repairs and providing mobile diagnostics. “We walk a fine line between customer service, safety and landlord requirements about what we can do on site. Safety becomes very important when operating in active, busy yards,” Darakos explains.

Jim Reed, vice president of new business and personnel development, TA Truck Service, says they do not currently offer oil changes as part of their ...Read the rest of this story

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