Charting Global Economy: Home Construction a U.S. Bright Spot

(Bloomberg) -- Home construction keeps powering ahead and general business activity remains firm in the U.S., exports from South Korea are picking up and U.K. household balance sheets are healthier.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:

U.S.

Home construction starts rose last year to 1.38 million, the highest since 2006, as attractive mortgage rates spurred demand. With inventories of both new and previously owned homes extremely lean, builder backlogs continued to mount late in the year, indicating residential construction will stay robust for months to come.

Business activity at manufacturers and service providers accelerated at the start of the new year, while capacity constraints generated more inflationary pressures. In addition to a pickup in the composite index, the IHS Markit measure of manufacturing advanced to the highest reading in data back to May 2007. Gauges of factory production, orders, export demand and employment all strengthened in January.

Europe

The health of U.K. household balance sheets should mean the economy rebounds quickly once enough people are vaccinated and restrictions lifted, according to Bloomberg Economics.

Sweden finished 2020 on a stronger footing than most economists had forecast, helped by resilient consumer demand and a rebound in manufacturing. But Bloomberg Economics expects extended restrictions on public life to combat the new variant of Covid-19, forcing the economy to contract in the first quarter.

Asia

China’s successful control of Covid-19 made it the only major economy to have grown last year, but wide income inequality and still weak consumer spending reflects an unbalanced recovery.

South Korea’s early trade data showed exports continued to rise in January, as demand for tech products stayed resilient amid a global resurgence of the coronavirus.

Emerging Markets

South Africa’s decision last week to limit travel though 20 of its border crossings to curb the spread of Covid-19 has blocked hundreds of thousands of foreign workers trying to return through Beitbridge from Zimbabwe after the December holidays.

South Africa may be forced to revise its tax increase targets as its budget shortfall is set to breach wartime levels for a second consecutive year.

World

The world’s largest advanced economies recovered very slowly after the holiday slump amid stubbornly high Covid-19 infection rates and stricter containment measures.