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
| Jan 9, 2012
A new journey for KSS Architects co-founder
Kehrt's legacy of projects include Rutgers University's Biomedical Engineering Building, the renovation and expansion of Cornell University School of Hotel Administration, the recent new campus center at The Richard Stockton College of New Jersey and Princeton Township's Municipal Complex.
| Jan 8, 2012
TCA releases The Construction of Tilt-Up
The newest publication from the TCA is the second in a planned trilogy of resources covering the architecture, engineering and construction of Tilt-Up
| Jan 8, 2012
WHR Architects promotes Joel Colwell, AIA, to principal
With over 30 years of experience, Colwell has managed large-scale, complex projects for major healthcare systems as well as challenging smaller renovations and additions — all with notable success.
| Jan 6, 2012
Doug Wignall named president of HDR Architecture
HDR Architecture, Inc. is known for its award-winning designs for urban environments, campuses and buildings in the healthcare, science and technology, civic, justice and higher education markets.
| Jan 6, 2012
Gensler unveils restoration and expansion of Houston's Julia Ideson building
The "new" building will serve as a repository of Houston memorabilia and rare archival material as well as the city's official reception space and a venue for exhibits, meetings and other special events.
| Jan 6, 2012
New Walgreen's represents an architectural departure
The structure's exterior is a major departure from the corporate image of a traditional Walgreens design.
| Jan 6, 2012
Summit Design+Build completes Park Place in Illinois
Summit was responsible for the complete gut and renovation of the former auto repair shop which required the partial demolition of the existing building, while maintaining the integrity of the original 100 year-old structure, and significant re-grading and landscaping of the site.
| Jan 4, 2012
Siemens acquires Pace Global Energy Services
Acquisition will enhance portfolio with new energy consulting and management services.
| Jan 4, 2012
Shawmut Design & Construction awarded dorm renovations at Brown University
Construction is scheduled to begin in June 2012, and will be completed by December 2012.
| Jan 4, 2012
Skanska acquires Industrial Contractors
Industrial Contractors Inc. is a contractor in the commercial, industrial and power markets of the Midwest. The company employs 2,400 people and in 2011 the revenues are estimated to be approximately $500 million.
