New Home Construction Slows Again

New home construction slowed for a third straight month in July as high mortgage rates cut into sales, which in turn could check growth elsewhere in the economy.

Housing starts slipped 1.3 percent in July to a seasonally adjusted 1.46 million annual rate, smallest since 1.44 million in March, the report said. Builders had laid foundations at a 1.48 million rate in June.

“The level of activity is still good,” maintained economist David G. Seiders of the National Association of Home Builders. “Our second half outlook is for the market to weaken further, but we’re still talking about a 5 percent increase over 1995.”

In fact, starts during the first seven months of 1996 were 12.4 percent above those of the same period a year ago. Starts for all of 1995 totaled 1.35 million.

Regionally, starts fell 12.2 percent in the West and 4.1 percent in the South. But they shot up 17.1 percent in the Midwest and rose 2.4 percent in the Northeast.

In other economic news this week:

The government reported that industrial production rose just 0.1 percent in July, while the nation’s factories were operating at 83.2 percent of capacity, down from 83.4 percent a month earlier.

The Labor Department said workplace productivity slipped 0.1 percent in the second quarter. Output rose 4.2 percent, but hours worked increased even more - 4.3 percent.

The Commerce Department said business inventories rose 0.1 percent in June.