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Report from
North America
US housing starts fell sharply in May
Housing starts fell sharply below expectations in May as
home-building activity declined. The US Department of
Commerce reported that housing starts, a gauge of new
residential construction, fell 15.4% in May to 1.177
million. Economists polled by The Wall Street Journal
expected a reading of 1.43 million and for housing starts to
fall 2.4% over the month. Starts were down 8.7% in May
from the same month of 2025.
Single-family homebuilding fell to an eight-month low in
May, pressured by higher mortgage rates and building
material prices. The decline combined with a plunge in
multi-family housing starts to push down overall
homebuilding to a six-year low last month. Labor and
building lots are also scarce, making it difficult for
builders to respond to a housing shortage that has created
an affordability crisis.
"There is little indication that US home building will break
to the upside anytime soon, given high mortgage rates,
previous over-building in the South, elevated new home
inventories relative to sales, and the current depressed
level of builder activity in the NAHB survey," said Sal
Guatieri, a senior economist at BMO Capital Markets.
Single-family housing starts, which account for the bulk of
homebuilding, fell 1.9% to a seasonally adjusted annual
rate of 882,000 units. Single-family homebuilding
declined in the South and West regions but increased in
the Northeast and Midwest. It decreased 6.7% on a year-
over-year basis in May.
Housing starts across Canada came in at a seasonally
adjusted annualized rate of 261,377 units in May, a 6.1%
decrease from the month before, Canada Mortgage and
Housing Corp. said. Still, the result bested market
expectations for 255,000 housing starts, according to
economists at Bank of Nova Scotia.
See: https://www.cmhc-schl.gc.ca/professionals/housing-
markets-data-and-research/housing-data/data-tables/housing-
market-data/monthly-housing-starts-construction-data-tables
and
https://www.census.gov/construction/nrc/index.html
May home sales surged to the highest level since
December
Sales of previously owned homes rebounded more than
expected in May, after mortgage rates pulled back slightly
in April.
Existing home sales in May rose 3.2% from April to a
seasonally adjusted, annualised rate of 4.17 million units,
according to the National Association of Realtors (NAR).
Economists were expecting a gain of less than 1%. Sales
were also up 3.2% from a year earlier, the strongest pace
since December.
"Improving affordability is helping drive this momentum,"
said Lawrence Yun, Chief Economist for the NAR. "Even
with mortgage rates ticking up compared to earlier in the
year, they remain lower than a year ago and are essentially
at the long-term historical average. Income gains are also
outpacing home price growth by a small margin in most
parts of the country."
Regionally, the Northeast saw a 2.2% increase in sales
month on month to an annual rate of 460,000 which was
down 8.0% from the previous May. In the Midwest there
was a 6.4% increase in sales month on month to an annual
rate of 1.0 million, up 2.0% over last May. There was a
3.2% increase in sales month on month in the South to an
annual rate of 1.96 million with a 5.9% year on year gain.
But in the West, there was no change in sales month on
month with an annual rate of 750,000, up 5.6% from last
year.
See: https://www.nar.realtor/research-and-statistics/housing-
statistics/existing-home-sales
Builder sentiment remains weak
Builder sentiment remains subdued as rising material
costs, elevated mortgage rates, and ongoing affordability
challenges continue to strain the housing market,
according to the National Association of Home Builders
(NAHB)/Wells Fargo Housing Market Index (HMI).
Builder confidence in the market for newly built single-
family homes fell two points to 35 in June. This is the 14th
straight month that sentiment has remained below 40, a
streak not seen since 2011-2012 during the foreclosure
crisis.
“With the nation short about 1.2 million homes, builder
sentiment will remain soft until barriers are eased and
conditions improve for home building,” said NAHB
Chairman Bill Owens, a home builder and remodeler from
Ohio.
Owens called upon Congress to help the industry by
passing several legislative aids including a major housing
package before the Senate, a separate bill to address the
construction labor shortage, and a measure to prevent state
and local bans on natural gas in new homes.
See: https://www.nahb.org/news-and-economics/press-
releases/2026/06/builder-sentiment-remains-weak-amid-
affordability-concerns
and
https://www.woodworkingnetwork.com/news/woodworking-
industry-news/builder-sentiment-remains-weak-june-amid-
affordability-concerns
US job growth remained strong in May
The US economy's recent strong run of job growth
continued through May. The Bureau of Labor Statistics
said the US added 172,000 jobs in May, well above
economists' expectations, and the unemployment rate held
steady at 4.3%, as expected. That continues the trend of
the strong reports in March and April.
Growth in the health care sector continued while most of
the gain for the month was in jobs in the leisure and
hospitality industry and well as jobs in local government.
Employment showed little change over the month in other
major industries, including construction and
manufacturing.
The report “was much stronger-than-expected and shows
that the labor market is turning a corner after a rough past
12 months driven by fears of AI and uncertainty over
geopolitics and tariffs," said Glen Smith, chief investment
officer at GDS Wealth Management.
See: https://www.bls.gov/news.release/pdf/empsit.pdf
and
https://www.businessinsider.com/jobs-report-may-data-live-
updates-2026-6#overall-the-job-market-is-looking-healthy
Consumer sentiment rises for the first time in three
months
US consumer sentiment may finally be recovering after
falling to historic lows due to wartime price spikes. The
University of Michigan’s mid-June survey of Americans
showed that sentiment rose 9% to a preliminary reading of
48.9 early this month, the first increase since February
before the United States and Israel’s destabilising war with
Iran sent global energy prices surging.
Gas prices, which heavily influence people’s perception of
the economy, climbed in the several weeks after the war
began, pushing sentiment down to a record low. Gas prices
have declined in recent weeks, which has helped sentiment
recover.
“This month, consumer sentiment ticked up… with
consumers experiencing some relief due to the early-
month easing in gasoline prices,” Joanne Hsu, the surveys’
director, said. “Lower-income consumers exhibited a
particularly strong sentiment increase, consistent with the
fact that gasoline comprises a larger share of their
budgets.”
Sentiment is finally up from a level lower than anything
seen during foreign wars, 9/11, the Great Recession, the
pandemic, and any prior bouts of high inflation in the post-
World War II era. But sentiment will likely remain in the
dumps unless gas prices continue to fall meaningfully,
likely requiring oil tankers to flow freely again through the
Strait of Hormuz. Even with June’s early gains, however,
views of the economy are still relatively dour.
See: https://www.sca.isr.umich.edu/
US manufacturing activity scales to four-year high
US manufacturing activity increased more than expected
in May, hitting the highest level in four years, likely
driven by businesses front-loading orders amid rising
prices and shortages because of the war with Iran.
The Institute for Supply Management said its
manufacturing PMI advanced to 54.0 last month, the
highest reading since May 2022, from 52.7 in April. A
reading above 50 indicates expansion in manufacturing,
which accounts for 9.4% of the economy. Economists
polled by Reuters had forecasted the PMI to rise to 53.
Of the industries surveyed by ISM, 16 reported growth in
May, including the Furniture & Related Products sector.
The only industry reporting contraction in May was Wood
Products.
Manufacturing has now grown for five straight months,
anchored mostly by an artificial intelligence spending
spree. The US-Israeli war with Iran has closed the Strait of
Hormuz, severely disrupting the shipping of commodities
and raising prices of goods like energy, aluminum and
fertilizers.
Despite the growth and an increase in orders, factory
employment remained subdued last month. The ISM's
manufacturing employment index posted its 32nd straight
month of contraction after expanding in September 2023.
The ISM has noted that managing head counts remains the
norm in the sector as opposed to hiring, mostly through
layoffs, attrition and not backfilling positions.
Manufacturing employment has declined by about 77,000
jobs since January 2025.
See: https://www.ismworld.org/supply-management-news-and-
reports/reports/ism-pmi-reports/pmi/december/
and
https://www.msn.com/en-us/money/markets/us-manufacturing-
activity-scales-four-year-high-in-may-ism-says/ar-
AA24ylRq?ocid=BingNewsVerp
US Trade Commission to keep existing duties on
Chinese wood mouldings and millwork
The US International Trade Commission (USITC)
determined June 12 that revoking the existing
countervailing and antidumping duty orders on wood
mouldings and millwork products from China would likely
lead to continuation or recurrence of material injury within
a reasonably foreseeable time.
As a result of the commission’s affirmative
determinations, the existing orders on imports of this
product from China will remain in place.
Imports of wood mouldings and millwork products from
China remain strictly regulated by US trade laws. The
action comes under the five-year (sunset) review process
required by the Uruguay Round Agreements Act. See the
attached page for background on these five-year (sunset)
reviews.
The Commission’s public report, Wood Mouldings and
Millwork Products from China, will contain the views of
the Commission and information developed during the
reviews. The report will be available on the USITC
website by July 22, 2026.
See:
https://www.usitc.gov/press_room/news_release/2026/er0612_68
728.htm
and
https://www.woodworkingnetwork.com/news/woodworking-
industry-news/trade-commission-keep-existing-duties-chinese-
wood-mouldings-and
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