Housing starts declined at the slowest pace in eight months in February, a sign that the economy is recovering from the building slump driven in part by a change in construction regulations.

Groundbreaking on new homes and condominiums slid 5 percent from a year earlier after falling 5.7 percent in January, the land ministry said Monday. The median estimate of 28 economists surveyed was for a 1 percent drop.

A recovery in starts, which plunged to a four-decade low last year, may help Japan weather the fallout from the slowdown in the U.S., its largest export market. The housing slump wiped more than 1 percentage point from the nation's 3.5 percent annualized growth last quarter.