There are numerous points that mainstream media pundits are passing over or missing in the latest economic report. Certainly, the major news outlets fail to mention manufactured housing (MH) at all when it comes to economic data and potential impact.
The Daily Business News will begin by setting the stage with some terminology.
The Department of Commerce’s (DoC) Bureau of Economic Analysis (BEA) tells the Daily Business News that “BEA produces some of the most closely watched economic statistics that influence decisions of government officials, business people, and individuals. These statistics provide a comprehensive, up-to-date picture of the U.S. economy. The data on this page are drawn from featured BEA economic accounts.”
“Gross domestic product is a monetary measure of the market value of all the final goods and services produced in a period of time,” explains Wikipedia.
Among the factors often glossed over is the drag caused by the windstorms and other disasters of 2017. It’s significant to note the growth in spite of hundreds of billions of dollars in losses caused by hurricanes and other natural disasters.
Best Quarterly Data from the BEA in Years
“Real gross domestic product increased at an annual rate of 4.1 percent in the second quarter of 2018 (table 1), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.2 percent (revised),” said the BEA to MHProNews.
“The increase in business investment reflected increases in structures, intellectual property products, and equipment. The increase in government spending reflected increases in federal national defense, and state and local government spending,” per the BEA.
Structures, of course, includes commercial and residential building. The later includes HUD Code manufactured homes, and both of those categories include modular construction too.
Income growth has also been steady, which is useful for incentifying home buying. But as some pundits have noted, even in a tight labor market, wage growth is still more modest than some would expect. Why?
One answer is technology, as there is a balance of economic pressure from automaton and robotics that could replace human labor. Amazon warehouses, and numerous retailers, are using more robotics, automation or self-checkout. Those work to depress wage growth.
But another is the downward pressure on pay that illegal immigration causes.
Notice that legal immigration can impose some downward pressure – depending on the field of activity, supply and demand – but legal immigrants are still subject to minimum wages.
By contrast, illegals may take jobs that undercut minimum wage laws.
Competition from illegals who are often paid ‘under the table’ thus acts as a drag on overall wage growth. That’s not a political statement, that’s economic reality 101.
Manufactured Housing and the Economy
There’s an interesting new CNN article that we will analyze in a separate report, because it cites research previously spotlighted by MHProNews.
What we will note for this report is the following. There is plenty of demand for new housing. A growing economy is good for new housing demand. So why is manufactured housing lagging?
The Daily Business News spotlighted the fact that new conventional housing sales have dragged recently. See that linked report, which can be referenced later for more details, below.
The manufactured home market has suffered for over a decade due to regulatory, placement, capital, and financing challenges. That must frankly be coupled with a widespread lack of understanding for the realities of modern manufactured homes, vs. the mobile homes of 42 plus years ago.
There are companies that more successfully address the perception issues on their local market level than their competitors do. Those who do so see sales grow.
Overall however, MHVillage and some state data point to warning signs, even though there is plenty of interest.
These facts point to image and public education needs that ideally are addressed at the local market level, because all sales are local.
The facts about manufactured homes have been available for decades. An example of overall positive third-party research is linked below.
But regulatory reforms and financing have been arguably hobbled. The new report below takes a fresh look at efforts on that front.
The economy and manufactured housing could both be growing more rapidly. The report linked below provides a snapshot of how that could be accomplished.
The National Low Income Housing Coalition (NLIHC) says in a new post that over 7 million new affordable housing units are needed.
The National Association of Realtors (NAR) Chief Economist Lawrence Yun has said there is a total of shortage of some 8.3 million housing units needed.
Those are the examples of why manufactured homes could be growing at a faster pace. Home building factories can arguably ramp up the training of labor faster, per sources, than many site builders can.
Next Step Solutions?
A successful independent has said that he supports another new post-production association, to address the needs. “…If retailers would bow up and tell the MHI manufacturers they want dues paid to a new association rather than MHI there will be change. I do believe the majors have weaponized regulation that further entrench their companies or widens and deepens their moat. Keep my name off it please but I’ll support the efforts if [there] is enough backbone out there,” said the quoting the message to MHProNews.
Two state associations came to a similar conclusion last year, and are in the process of launching a new communities focused association.
Will retailers and other independents involved in the post production sector do the same? MHARR said last year, they will support and encourage such an effort.
The economy is growing. The Washington Post made it clear that MHI did not intervene in the Pam Danner related issues at HUD.
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