Construction Spending Rose Unexpectedly in April

Washington, DC, June 1, 2009--U.S. construction spending unexpectedly rose in April as the housing slump eased and more commercial projects got underway.

The 0.8 percent gain was the biggest since August and followed a revised 0.4 percent increase the prior month, the Commerce Department said today in Washington.

Residential construction rose 0.6 percent and work on power plants and factories propelled commercial construction up.

Federal and local government spending will ramp up as funding from the $787 billion fiscal stimulus package filters through to worksites. Borrowing rates near historic lows and improving business and consumer confidence may help stem the worst housing slump since the Great Depression.

Economists projected construction spending would drop 1.5 percent, according to the economists.

Non-residential construction, including public projects, increased 0.8 percent. Compared with a year earlier, it was up 2.5 percent.

Public construction decreased 0.6 percent, restrained by declines in the building of schools, water-supply and sewage- treatment plants. Such projects may increase in coming months as funds from the government's infrastructure stimulus spending filter through to worksites.