In a saucepan, combine sugar, cornstarch, cinnamon and nutmeg. Stir with water until smooth. Bring to a boil over medium heat; cook and stir for 1 minute. Reduces heat. Add apricots and butter; heat, pour into a greased shallow 2-qt. baking dish.
For topping, combine the flour, sugar, baking powder and salt in a bowl; cut in butter until crumbly. Stir in milk, just until moistened. Scoop over the hot apricot mixture. Bake at 400° until golden brown and a toothpick is inserted into the topping comes out clean, 30-35 minutes.