How Building Permits Determine the National Economy

PAMM Forex Model pig money

Building Permit is also known as Building Approval. It’s an indicator that measures the growth level of housing construction. Building Permit is an important indicator in relation with the construction industry since there was a tight regulation before any construction project can legally happen. This data measures a number of new housing or building approval that has been issued by government. In other words, the Building Approval is a key of the construction business. Without this kind of approval, there is no new building or housing construction can officially occur.

Building Permits data is released on monthly basis by a government or other controlling department of particular country. It’s used to find out the health of housing sector. Building permits data is also an indicator used to measure building construction activity, which involves the number of employment, acquire of housing material products, and housing investment.

In general, economists and investors will closely watch the building permit data to decide how healthy the economy is. That’s why the building permit or building approval report can be the main clue for them to forecast the economy in the upcoming days. The more building permits issued, the more investment is allocated in housing market. In the US, this contributes 5% of the national economy. The unfavorable economic environment may affect the decline of the planned construction activities.

In the United States, the building approval data is released by the Census Bureau and is issued in the New Residential Construction report. The Census Bureau reports the number of total monthly building approvals on the 18th work day of every month.

In Australia, the building approval report is presented in the form of percentage. It compares the changing number of building approval between the prior and current month. The AUD will get stronger when the report shows higher number in the current building approval than the predicted one.  It goes the same way with other currencies. If the building permit number increases, so does the currency.

Happy trading in PAMM Investments !

Don’t forget to read this important article for PAMM trader

1. How to become a PAMM Trader

2. Understanding your Forex Trader Level as PAMM Trader