One part of the economy that has not slumped is real estate, which this year has been given a boost by lower loan rates resulting from the Federal Reserve's string of interest- rate reductions. The strength came from commercial building, home improvements and government projects. The March performance was stronger than expected, with many analysts predicting spending would be flat. Healthy construction and housing activity have helped keep the economy afloat during the slowdown that started in the second half of last year, economists said. Argus Research Corp. The advance follows a 0.9 percent rise in February, according to revised figures, stronger than the government previously thought.
Clouds remain on the economic horizon, however.
The purchasing managers' Ore said the major concerns among manufacturers continue to be energy costs and softening demand among many markets, but added that the index does offer limited good news. As the sector is struggling to gain a foothold that will reverse the decline, it is encouraging that pricing pressures appear to be moderating and inventory liquidation has accelerated,'' he said. Zandi said mild encouragement could be taken from the purchasers' index of new orders to manufacturers, which rose from 42.3 in March to 45.9 in April. While that still marks a decline in orders taken, the rate has slowed. That is notable because new orders often are a leading indicator because they fuel production and employment in the future, he said.