Construction spending surges in April

Construction spending rose in April by the largest amount in nearly 10 years, possibly signaling that the nation's hardest-hit sector could finally be recovering from the protracted recession. 

Construction activity jumped 2.7 percent in April, bringing spending to $869 billion compared to a revised 0.4 percent gain in March, the biggest single-month surge since August 2000, according to figures released Tuesday by the Commerce Department. 

March figures were revised up from an initial 0.2 percent, providing additional evidence of improving sector strength. 

Residential construction rose 4.4 percent to a seasonally adjusted annual pace of $263 billion, as home building was bolstered by tax incentives of up to $8,000 for purchases through April 30. Economists have expressed concern that building and sales could drop, hurting the housing recovery, with the expiration of the tax credits. 

Nonresidential construction rose 1.7 percent in April to an annual rate of $302.7 billion, the first improvement since March 2009. But that's still off by 24.9 percent from April of 2009. The uptick comes from increases in private sector work on communications projects and power generation facilities, whereas commercial and school construction fell in April. 

Government spending increased 2.4 percent in April to $303.3 billion behind a 2.3 percent increase in spending, spurred by stimulus money from state and local governments.