Home construction in the U.S. dropped to the lowest level in over a year in the last month of 2010 as the housing market continues to struggle, according to The Wall Street Journal. On Wednesday, the Labor Department said that housing starts shed 4.3% to a seasonally adjusted level of 529,000 in December, which is down from 553,000 the prior month and far greater than economists forecast for a 1,000 unit decline. Single family home construction represents 80% of the overall market and dropped 9% during December, and led the annual change in new-home construction to a 8.2% drop.
The construction industry has remained weak since the onset of the financial crisis as the housing market struggles. The National Association of Home Builders found its housing market index was flat at 16 in January, which is well below the 50-point indicator for optimism. Some recent improvements in the labor market could lead to a stronger economy and housing market, and on Wednesday Moodys Analytics and IHS Global Insight reported that manufacturing payrolls grew 1.2% in 2010, which is the first increase in over a decade. The groups are looking for 2.5% payroll growth in 2011.