U.S. construction spending rose 0.8 percent in April, the Commerce Department reported Monday, in contrast to economists' expectation of a decline. The unexpected advance—the biggest since last August—marked the second consecutive month that builders increased spending on construction projects. Economists had predicted a 1.2 percent decline in April construction spending. Before March's increase, construction spending had declined for five consecutive months. According to the report, private builders increased spending on housing projects by 0.7 percent, contributing to the overall improvement in April. It was the first time since August that private homebuilders increased spending. Private spending on other construction projects rose 1.8 percent in April, following a 2.6 percent advance in March. Builders increased spending on hotels and motels, factories, power plants, and private heath-care facilities, more than offsetting reductions in spending on office buildings and recreation projects. Government construction spending fell 0.6 percent in April, reflecting spending cuts on schools, hospitals, public health-care buildings, and sewer and water-supply projects. The recession has devastated the construction sector. Builders cut spending on residential projects in the first quarter of 2009 at a 38.7 percent annual rate, the most since 1980. Spending on commercial projects fell sharply, too.
