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
Multifamily Housing | Mar 24, 2023
Average size of new apartments dropped sharply in 2022
The average size of new apartments in 2022 dropped sharply in 2022, as tracked by RentCafe. Across the U.S., the average new apartment size was 887 sf, down 30 sf from 2021, which was the largest year-over-year decrease.
Government Buildings | Mar 24, 2023
19 federal buildings named GSA Design Awards winners
After a six-year hiatus, the U.S. General Services Administration late last year resumed its esteemed GSA Design Awards program. In all, 19 federal building projects nationwide were honored with 2022 GSA Design Awards, eight with Honor Awards and 11 with Citations.
Healthcare Facilities | Mar 22, 2023
New Jersey’s new surgical tower features state’s first intraoperative MRI system
Hackensack (N.J.) University Medical Center recently opened its 530,000-sf Helena Theurer Pavilion, a nine-story surgical and intensive care tower designed by RSC Architects and Page. The county’s first hospital, Hackensack University Medical Center, a 781-bed nonprofit teaching and research hospital, was founded in 1888.
Project + Process Innovation | Mar 22, 2023
Onsite prefabrication for healthcare construction: It's more than a process, it's a partnership
Prefabrication can help project teams navigate an uncertain market. GBBN's Mickey LeRoy, AIA, ACHA, LEED AP, explains the difference between onsite and offsite prefabrication methods for healthcare construction projects.
Geothermal Technology | Mar 22, 2023
Lendlease secures grants for New York’s largest geothermal residential building
Lendlease and joint venture partner Aware Super, one of Australia’s largest superannuation funds, have acquired $4 million in support from the New York State Energy Research and Development Authority to build a geoexchange system at 1 Java Street in Brooklyn. Once completed, the all-electric property will be the largest residential project in New York State to use a geothermal heat exchange system.
Women in Design+Construction | Mar 21, 2023
Two leading women in construction events unite in 2023
The new Women in Residential + Commercial Construction Conference (WIR+CC) will take place in Nashville, Tenn., October 25-27, 2023. Combining these two long-standing events aligns with our mission to create an event most impactful for women in the $1.4 trillion U.S. commercial and residential design and construction industry.
Mass Timber | Mar 19, 2023
A 100% mass timber construction project is under way in North Carolina
An office building 100% made from mass timber has started construction within the Live Oak Bank campus in Wilmington, N.C. The 67,000-sf structure, a joint building venture between the GCs Swinerton and Wilmington-headquartered Monteith Construction, is scheduled for completion in early 2024.
Sports and Recreational Facilities | Mar 17, 2023
Aurora, Colo., recreation center features city’s first indoor field house, unobstructed views of the Rocky Mountains
In January, design firm Populous and the City of Aurora, Colo. marked the opening of the Southeast Aurora Recreation Center and Fieldhouse. The 77,000-sf facility draws design inspiration from the nearby Rocky Mountains. With natural Douglas Fir structure and decking, the building aims to mimic the geography of a canyon.
Contractors | Mar 17, 2023
Skanska hires first Director of Mass Timber & Prefabrication
Global construction and development firm Skanska USA has hired Dean Lewis as its first Director of Mass Timber & Prefabrication. Lewis will be responsible for the company’s work on prefabrication and mass timber projects across the United States,
Concrete | Mar 17, 2023
American Concrete Institute releases new guide for shotcrete construction
The American Concrete Institute, through the work of ACI Committee 506, has released ACI PRC-506-22: Shotcrete—Guide. The newly introduced guide provides information on materials and properties of both dry-mix and wet-mix shotcrete and covers most facets of the shotcrete process including application procedures, equipment requirements, and responsibilities of the shotcrete crew.