KB Home Sees Some of the Momentum of the Residential Construction Increase

KB homeAs new residential construction increases in communities around the country, Los Angeles-based contractor KB Home continues to take on new projects that reflect the latest boosts in momentum for the construction industry.

In Texas, Florida and California, KB Home’s new projects continued to be strong throughout the latter half of 2013. Housing starts in the company’s nationwide markets are expected to remain just as strong in the first half of 2014.

KB Home’s sales increased 11 percent in the first quarter of 2014, according to Investor’s Business Daily. Earnings rose 12 cents a share in that same period.

The increase in KB Home’s business follows trends reported by general contractors, builders and design-build companies throughout the country. According to data from the financial information company Sageworks, private residential construction companies showed stable financial health in 2013. Sales and profits remained strong, along with factors such as liquidity ratios.

Profit margins for residential construction companies stood at a 7.4 percent net margin for the 12-month period of 2013. This represents a more than doubling of the 3.6 percent profit margins seen in 2012, according to Sageworks data.

The data from Sageworks indicates continued improvements in the construction industry and ongoing recovery from the effects of the recent decline in housing. The improvements in residential construction appears to be driven by overall improvements in the U.S. economy and the construction market.

Residential construction sales increased by nearly 14 percent in late 2013 and early 2014. At the same time, the financial health and stability of construction firms in 2013 showed important indicators, such as the debt-service coverage ratio, was the highest since 2006.

Construction Monitor compiles and distributes building permit data and information on construction starts and projects throughout the United States. Contact us today for more information on the improved health of the construction industry, how this improvement is being reflected by increases in residential construction, and how these boosts can affect your business and geographical area.

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