The Real Deal New York

What does the housing recovery have to do with tobacco?

December 12, 2013 04:46PM
By Business Insider

Smoking

Smoking and housing starts apparently go hand in hand

For all the regulation, tax increases, and bad PR, the tobacco industry is still monstrous — and as such, is still interesting to investors.

Like any other industry, analysts try to predict where it’s headed. But because of tobacco’s negative cultural cachet (and carcinogens), commentary can feel a little uncomfortable.

Take this note from RBC, which argues that the 65 percent bump in housing starts since December 2010 will help out the tobacco industry.

What does the housing recovery have to do with tobacco?

“With housing starts on the rise, construction workers (a leading group of tobacco consumers) are entering the workforce and have incremental income to spend on tobacco,” writes RBC.

More construction workers, who are typically lower income and thus more likely to smoke, have money to buy cigarettes.

Housing starts since December 2010

Housing starts since December 2010

MENU