New-home construction rebounded sharply in February, but an indicator of future growth offered a less-optimistic view of the building market.
The Commerce Department said Tuesday that new-home building rose by 9 perent last month, to a seasonaly adjusted 1.525 million annual rate. Applications for new buiding permits, however, dropped by 2.5 percent. Permits are seen as a more forward-looking indicator as they measure plans for future construction.
The increase in February's construction numbers comes on the heels of January's steep decline, when activity fell by more than 14 percent, the slowest rate in more than nine years.
Many economists have predicted a sharp slowdown within the broader manufacturing sector as a result of the ongoing retreat in the housing market, but the indsutry appears to be weathering the storm, at least for now.