Real gross domestic product (GDP) expanded by just 0.7% (seasonally adjusted annual rate) during the fourth quarter of 2015, according to an analysis of Bureau of Economic Analysis data released by Associated Builders and Contractors (ABC). This paltry growth follows a 2% increase during the year's third quarter and a 3.9% increase during the second quarter. For the year, GDP expanded by 2.4%, matching the rate of growth seen in 2014.
Nonresidential fixed investment shrank by 1.8% in the fourth quarter, the first time the segment has contracted since the third quarter of 2012. For the year, nonresidential fixed investment expanded by 2.9% after growing by 6.2% in 2014 and 3% in 2013.
"The economy did not end the year well," ABC Chief Economist Anirban Basu said. "Today's GDP data adds weight to the argument that the U.S. is in a corporate profits recession, an industrial recession, and was experiencing a softening of investments. With the exception of the residential building sector, business capital outlays have declined as corporations deal with a combination of sagging exports, competitive imports, declining energy related investments, rising wage pressures and healthcare costs.
"Recent turbulence in financial markets suggest that capital availability may continue to soften," Basu said. "While residential construction is likely to continue to recover given the combination of low interest rates and accelerating household formation, nonresidential construction spending growth may begin to sputter a bit as those who deploy capital become more defensive. This is not to suggest that nonresidential construction spending is set to decline. Many contractors continue to report significant and growing backlog. However, the current situation suggests that the growth in backlog and ultimately in spending may not be quite as rapid as it was earlier in 2015."
Six key input prices rose or remained unchanged in October on a monthly basis, while one remained unchanged:
- Personal consumption expenditures expanded 2.2% in the fourth quarter after growing by 3% in the third quarter.
- Spending on goods grew 2.4% in the fourth quarter after expanding 5% in the third quarter and 5.5% in the second quarter.
- Real final sales of domestically produced output increased 1.2% for the fourth quarter after a 2.7% increase in the third quarter.
- Federal government spending increased 2.7% in the fourth quarter, the segment's largest increase since the third quarter of 2014.
- Nondefense spending increased 1.4% in the fourth quarter after expanding 2.8% in the previous quarter.
- National defense spending expanded by 3.6% in the fourth quarter after contracting by 1.4% during the third.
- State and local government spending contracted by 0.6% in the fourth quarter after increasing by 2.8% in the third quarter.
Related Stories
| Mar 12, 2012
Improving the performance of existing commercial buildings: the chemistry of sustainable construction
Retrofitting our existing commercial buildings is one of the key steps to overcoming the economic and environmental challenges we face.
| Mar 7, 2012
Firestone iPad app offers touch technology
Free app provides a preview of Firestone’s Roots to Rooftop Building Envelope Solution with an overview of all the products from ground and stormwater management solutions, to complete wall panel and commercial roofing system applications.
| Mar 7, 2012
LEO A DALY opens new office in Riyadh, Saudi Arabia
Jay N. Kline, Regional Manager – Saudi Arabia, to lead new office.
| Mar 7, 2012
Turner appointed Batson-Cook CFO and treasurer
Cecil G. Hood to continue in advisory role.
| Mar 7, 2012
Thornton Tomasetti names Dowdall VP of Kansas City office
Dowdall will be responsible for supporting the Property Loss Consulting, Building Performance and Building Sustainability practices nationally.
| Mar 7, 2012
LEO A DALY selected to design Minnesota Fallen Firefighters Memorial
The bronze, figurative sculpture of a firefighter rescuing a child, which is currently on display at the Minneapolis/St. Paul International Airport, is lit by natural light through a circular void in the monolith.
| Mar 7, 2012
Houlihan Lokey adds Steffen to Industrials Group
Steffen bolsters group with experience in the building materials and rorest product sectors.
| Mar 6, 2012
Country’s first Green House home for veterans completed
Residences at VA Danville to provide community-centered housing for military veterans.