February building approvals figures released by the Australian Bureau of Statistics shows the number of dwelling approvals increased by 3.1 per cent in February.

Private sector houses rose 0.5 per cent and non-house or 'other' dwellings rose 1.5 per cent, seasonally adjusted.

"We have seen indicators of consumer sentiment improve over recent months and we may well be seeing an early sign that this is flowing through to activity on the ground. After two consecutive months where approval numbers slipped back it is pleasing to see a material improvement in February," said Housing Industry Association (HIA) Economist, Geordan Murray.

"A 4.2 per cent increase in approvals for detached houses was the main driver of this result although approvals for multi-unit dwellings also posted a 1.6 per cent increase during February," Geordan Murray said.

Peter Jones, Master Builders Australia's Chief Economist also welcomed the improvement, but expressed concern that a negative trend has developed.

"Despite the improvement in the seasonally adjusted figures that were buoyed by an unusually high public sector housing figure, a negative trend has emerged in the 'other' dwellings sector (units and apartments),” he said.

"The overall negative trend in approvals is very worrying for builders. Despite green shoots and early signs of a recovery, momentum has failed to build.”

"The industry had been hoping for a much stronger recovery to take hold and the feedback from builders is that conditions are still very tough.”

"Looking beyond the rise in the headline figure, February's building approvals figure may squash some theories that the Reserve Bank's easing cycle has ended.”

"Time is running out for a sustained recovery in the building industry and the Reserve Bank must consider further interest rate cuts to encourage growth in the non-mining sectors of the economy," said Mr Jones.

In February 2013, total seasonally adjusted building approvals increased by an impressive 23.0 per cent in South Australia, 5.4 per cent in Western Australia, 3.8 per cent in Queensland and were flat in Victoria (up by 0.3 per cent). Seasonally adjusted building approvals fell in New South Wales (-7.7 per cent), and Tasmania (-5.3 per cent). In trend terms building approvals in February increased by 3.1 per cent in the ACT and fell by 10.5 per cent in the Northern Territory.