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Consumer Demand Indicators

Consumer demand indicators include construction data, building permits, construction spending, housing start and building permits, new home sales, existing home sales.

Construction data reflects the common index of consumer demand. This indicator displays the expenditures on housing, real estate loan payments as well as the demand for the durable goods connected with housing like furniture, household wares, plumbing fixtures. This indicator can also characterize the building volumes as the amount of the constructing facilities are directly dependent on the demand for the housing.

Construction data indicator mirrors the economic condition of a country as building industry makes up a weighty share of GDP. So the growth of a national currency rate is related to the changes in this indicator. Construction data index is influenced by interest rates because they can either encourage or discourage the demand for the real estate loans.

Building permits indicator figures out the amount of requests for the house building in the near future what characterizes it as an anticipative indicator of business activity. This indicator is sensitive to the changes in interest rates and the season which is typical of real estate market.

The index rise gives evidence to rather favorable tendencies in the amount of new houses built which ascertains the incomes rise. Despite the fact that building permits indicator does not impact forex essentially, its growth dynamics are proportionate to the national currency rate growth.

Construction spending indicator can be divided into three groups: building in the city, building on the outskirts of the city, the costs of building new houses. This indicator is subject to the seasonal fluctuations and is sensitive to the changes in interest rates, that is why it is not so much influential for forex.

Housing starts and building permits indicator combines the data on the amount of new constructing objects and the permits handed out in the period of a month.

New home sales and existing home sales indicators define the demand and supply on the real estate market where 84% of sales is occupied by existing home sales and only 16% is taken by new homes. Both indicators can greatly fluctuate from month to month depending on the season and interest rates. These indicators leg behind the changes in interest rates which can be explained by a high demand for the housing in the period of the economic growth. When there is an economic recession the demand for the housing appears to be low. At the beginning of the business cycle the low demand gives an incentive to the launch of new building.