In April, construction spending in the U.S. rose 0.8 percent, the highest gain since August 2008, surprised economists who were expecting a decline of 1.2 percent. The unexpected gain in April is the second straight month that builders increased spending on construction projects around the country. Prior to the gain in March, U.S. construction spending had fallen for five consecutive months.

Private builders increased spending on housing projects by 0.7 percent in April, which marked the first gain since August 2008. Private spending on all other construction projects other than residential ones jumped 1.8 percent during the same time period, following a 2.6 percent gain in March. Government construction spending, however, dropped 0.6 percent in April, due to spending cuts on schools, hospitals, and sewer and water-supply projects.

Since the recession that started in December 2007, builders have been hard hit. Construction spending on residential projects during the first quarter of 2009 declined at an annualized rate of 38.7 percent – the steepest drop since the spring of 1980. Economists are hopeful that cutbacks by businesses in the second quarter of this year will begin to tapper off. Additionally, Federal Reserve Chairman Ben Bernanke has said he hopes the recession, which is now the longest since World War II, will end later this year.

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