The level of activity in the housing industry remained essentially flat in August, according to data released Thursday by the U.S. Census Bureau.

In August, total housing starts moved up just 1.5% compared to the previous month to a seasonally adjusted level of 598,000 units. Single-family starts dipped 3% on a monthly basis, falling to a 479,000-unit pace.

“The market for single-family construction is slowly recovering,” said Patrick Newport, U.S. economist at IHS Global Insight in Lexington, Mass.

Year-over-year, August 2009’s total starts stand 29.6% below the same time last year; single-family starts are off 21.7% on an annual basis.

Building permits, which are considered a key indicator of future construction activity and economic activity, increased 2.7% in August on a monthly basis to a seasonally adjusted level of 579,000 units. Single-family permits barely budged, slipping 0.2% on a monthly basis to a permit pace of 462,000 units.

That did not surprise Newport.  “This reading does not trouble us--yet--since we expect the recovery to drag out over two to three years,” he said.

On an annual basis, total permits are down 32.4% and single-family permits are off 15.7%.

Regional single-family permit activity varied. The Northeast remained flat (0%) on a monthly basis, while the South (down 0.8%) and the West (down 2.1%) declined. Only the Midwest saw a month-over-month gain with a 3.9% increase.

“August's permits readings point to lackluster gains in single-family starts in September and October,” Newport noted.

Alison Rice is senior editor, online, at BUILDER magazine.