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WASHINGTON, DC-The US Commerce Department delivered unexpectedly good news–relatively speaking–for the construction industry. Construction spending rose 0.8% in April–the largest jump since August. The previous month’s spending rose a revised 0.4%. The industry instead had been expecting a drop of as much as 2.5%, according to Bloomberg News surveys of economists.

The rise was fueled by private sector non-construction activity, which rose 1.8%. Power and manufacturing were among the categories that saw new investment. Residential construction rose 0.6%.

This is not the first sign that a revitalized construction pipeline may be underway. Earlier this month AIA’s Architecture Billings Index reported that its new projects inquiry score was 56.8–the second month with very strong inquiries for new projects. Federal stimulus funds appear to be fueling this growing number of inquiries, says AIA Chief Economist Kermit Baker in a prepared statement.

Still, though, AIA’s ABI rating was 42.8 for the month, down from the 43.7 mark in March. As this is a forward looking economic indicator that would suggest several more months of bleak prospects. Indeed, the Associated General Contractors of America is cautioning not to read too much into this morning’s Commerce Department figures.

Bad news underlies the rosy top-line figure in today’s report on construction spending from the Census Bureau, Ken Simonson, chief economist for the AGCA, says in a prepared statement. Buried in the figures “is the grim reality: new single-family construction tumbled 6.7% in April and new multifamily construction slumped 2.6%.”

The total rose only because of a third residential component that the Census Bureau includes in the total but declines to show separately, he says: “improvements to existing single- and multi-unit buildings, which leaped 8.9% for the month. Although improvements are now the largest residential spending category, that number is obtainable only by subtracting the new single- and multi-family figures from the total.”

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