A quick look at housing start permits reveals the sad state of the residential construction industry. In January 2006, approximately 152,600 permits were issued for new-home construction. In January 2007, just 114,100 permits were issued. In January 2008, it was a mere 77,400. That's a 50 percent drop in two years.

According to www.federalhousingtaxcredit.com, "The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009, and before December 1, 2009."

What's the government's goal here? To encourage people to purchase real estate? Not necessarily. It wants to keep people employed. Building a new house creates jobs related to construction—work for architects, builders, plumbers, and electricians—and unleashes a buying spree for furnishings and appliances. This, in turn, supports jobs in retail sales, transportation, and manufacturing. I suppose a cynic would say that people with jobs pay taxes, and therefore the government's goal is to sustain itself, but that's a debate for another day.

Has this tax credit helped? Apparently. First, let's switch to a more sophisticated way to measure the data so we can gauge permit-issuing activity from one month to the next.

Many activities are influenced by the seasons; statisticians work over the data for the year to come up with the seasonal influence, then run the numbers out for 12 months. The result is a figure that is seasonally adjusted at an annual rate. Again, using home construction permits as an indicator, we see that the industry was doing well in January 2006 (2,212,000 permits issued); faltering in 2007 (1,626,000 permits issued in January), and foundering by 2008 (1,102,000 permits in January). By January 2009 it hit bottom when 531,000 permits were issued, seasonally adjusted at an annual rate.

So now let's get back to that question: Did the tax incentive work? Housing permits climbed unsteadily in 2009, reaching 580,000 in August. That's a 10 percent climb in seven months. Also, the end of the tax incentive program is looming (it expires Nov. 30), and the housing industry is feeling the effects. The rate of permit issuance fell to 575,000 in September.

Will Congress extend the plan? It appears as though it will. One likely scenario is to extend the entire tax benefit into 2010, then phase it out quarter by quarter. Will extending it help fabricators? Probably. Last year wasn't a very good year for appliance manufacturing (employment held steady at 72,000 employees) and 2009 was worse. In August it was down to 63,800. In the furniture industry, the situation was grim; it fell from 328,900 employees in January 2008 to 239,300 in August 2009.

Whether these trends change direction remains to be seen. I'll keep an eye on them and let you know in a future blog post.

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Are cracks in welds ever acceptable? Is the term 'crack' a misnomer for linear indications, hot tears, lack of fusion, and other weld characteristics, and are these characteristics acceptable?

A recent issue of the "Welding Wire" e-newsletter featured an item that originally appeared in the San Francisco Chronicle. The article, "Questions over welds delay Bay Bridge project," described how inspectors hired by the California Department of Transportation to monitor the fabrication of steel girders being used in the project reported finding cracked welds. The newsletter then posed the questions: Are a few minor cracks in welds for bridge components OK? Can inspectors be too strict?

Welders responded quickly. Here's what they had to say.

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My wife loathes when she walks into the family room and sees me watching a certain, shall we say, “intense” person jumping around a wacky set and talking stocks. OK, I admit it: I like watching Jim Cramer. I’m not a day trader. I don’t live and breathe the Dow. I haven’t even opened my 401(k) statements for the last quarter. But there’s something about Cramer that draws me. It’s not what he says; it’s how he says it. In a way, his behavior on the show could be a metaphor for the market. It’s crazy and hyper on the surface, but if you cut through the clutter, there are some rational moments here and there.

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As I type this, the line at the polling place across the street has finally shown signs of movement. It’s the morning of Nov. 4, and by evening we’ll know who will have the world’s largest bully pulpit for the next four years.

Seeing how the numbers are adding up, I won’t envy the winner. The Institute for Supply Management yesterday released its October numbers on manufacturing, and they weren’t pretty. The organization’s manufacturing index, the PMI, plunged to 38.9 percent, its lowest level in 26 years.

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As the Dow did its dance on a cliff’s edge yesterday, the FABTECH International® & AWS Welding Show kicked off with gusto yesterday here in Las Vegas, and the credit crunch seemed refreshingly far away. Why?

It’s because Jim Waters has visited Chinese cities with populations of more than 5 million—with no airport. “You know what I was thinking?”

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This post isn't about the dog days of summer, nor is it a list of Paris Hilton's "that's hot" endorsements. Rather it's a glimpse of one metal bending company that has a $7.4 billion backlog of projects—now that's hot.

It also is about the hottest manufacturing sectors in the U.K. And it touches on something that definitely is not hot.

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Manufacturing continues to plug along, not expanding, but not exactly in a slump either. The Institute for Supply Management’s index, the PMI, released this week, grew slightly, from 48.6 in April to 49.6 in May—still not in growth mode, but it’s more than most had predicted.

The view from the airplane window shows an economy as a series of dichotomies: on the one hand this, on the other hand that. There’s weakness in the auto and residential construction sectors, but on the other hand there’s growth in export-related manufacturing, including machine-building, and there’s continued growth in the commercial building sector for hospitals and hotels.

That’s the view at 30,000 feet. However, many have quite different views at ground level. Just ask the city dwellers on Manhattan Island.

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The new Dallas Cowboys stadium in Arlington, Texas, which will be the largest domed structure in the world when completed, will contain 670 tons of threadbar steel from Gerdau Ameristeel’s St. Paul, Minn., mill. Don't expect to see this steel if you visit the stadium, unless you have x-ray vision.

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I suppose I sunk to a new low Monday night (Sept. 25) when I became a fickle football fan. As the game between the Atlanta Falcons, my favorite team, and the New Orleans Saints began—the first in the reconstructed Superdome since Hurricane Katrina damaged the arena a year ago—I found myself pulling for the Saints. I blew off my husband’s frustrated comments at each mistake by the Falcons and each Saints’ success, and smiled inwardly. To many people, the repaired stadium is a symbol of New Orleans’ rise from the ruin wrought by Katrina—a sign that life just might return to some sort of normalcy. A sign of hope.

Tuesday I read a recap of the game on msnbc.com and watched the accompanying slideshow of the dome as a shelter, the damage it incurred, and its reconstruction. (View the article and click to launch the slideshow.) The slide that showed workers putting metal panels on the roof made me think of an interesting item that crossed my desk the other day about metal roofing.

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I confess; I'm an HGTV junkie. I watch the channel so frequently, I often begin watching a program only to realize I've seen it before. However, a recent Small Space episode was new to me and really captured my attention. A departure from the traditional building, remodeling, decorating, and landscaping fare, this episode, Small But Spectacular, featured a segment called Cargotecture, about two architects who constructed a weekend retreat from two steel cargo shipping containers. The architects have proposed shipping container homes for the Seattle waterfront area redevelopment.

The episode piqued my curiosity enough that I wanted to know more about the containers and possible uses beyond shipping goods and creating eyesores in neighborhoods adjacent to container storage yards. It seems I'm not the only one interested in the topic.

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