Construction Spending Rose Sharply in April

Washington, DC, June 1, 2010--Construction spending rose in April by the most since 2000 as all the major building sectors from housing to government projects showed strength.

The Commerce Department said that construction surged 2.7% last month compared to March. It was the biggest one-month improvement since August 2000.

The increase was led by a 4.4% jump in private residential construction, the first positive gain in this category since March 2009.

The 2.7% increase brought spending to $869 billion.

Sales boosted by a government incentive of as much as $8,000 helped reduce the number of unsold new houses in April to the lowest level in more than three decades, spurring housing starts.

Construction spending decreased 11% in the 12 months ended in April.

Private construction spending rose 2.9%, the most since July 2004. Homebuilding outlays jumped 4.4%, the biggest gain since October 2009. Private non-residential projects increased 1.7%, the most since September 2008 and led by factories and power facilities.

Spending on public construction rose 2.4% from the prior month. Federal construction spending increased 2.9%, while state and local government outlays rose 2.3%.