United States homebuilding and manufacturing production surged in February, driven by improved weather conditions and robust motor vehicle output. However, ongoing trade tariffs continue to pose risks to the broader economic recovery.
Single-family housing starts, which make up the majority of U.S. homebuilding, soared 11.4% to a seasonally adjusted annual rate of 1.108 million units, the Commerce Department’s Census Bureau reported.
Despite February’s rebound, housing starts declined 2.3% on a year-over-year basis. The sector faces headwinds from rising raw material costs, exacerbated by trade policies.
Earlier this month, President Donald Trump imposed and later suspended a 25% tariff on most Canadian and Mexican goods, which would have pushed duties on Canadian lumber to nearly 40%.
Meanwhile, tariffs on Chinese imports were raised to 20%, and new levies on steel and aluminum took effect, increasing costs for builders and manufacturers alike.
Manufacturing output also exceeded expectations, with U.S. manufacturing output jumping 0.9% in February, following an upwardly revised 0.1% gain in January, according to the Federal Reserve. Economists had forecast a more modest 0.3% rebound.
On an annual basis, manufacturing output rose 0.7%.
Meanwhile, total industrial production climbed 0.7% in February after a 0.3% increase in January, marking a 1.4% year-on-year gain.
