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
Giants 400 | Nov 8, 2022
Top 60 Sports Facility Contractors and CM Firms for 2022
AECOM, Mortenson, Clark Group, and Turner Construction top the ranking of the nation's largest sports facility contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Industry Research | Nov 8, 2022
U.S. metros take the lead in decarbonizing their built environments
A new JLL report evaluates the goals and actions of 18 cities.
Hotel Facilities | Nov 8, 2022
6 hotel design trends for 2022-2023
Personalization of the hotel guest experience shapes new construction and renovation, say architects and construction experts in this sector.
Green | Nov 8, 2022
USGBC and IWBI will develop dual certification pathways for LEED and WELL
The U.S. Green Building Council (USGBC) and the International WELL Building Institute (IWBI) will expand their strategic partnership to develop dual certification pathways for LEED and WELL.
Reconstruction & Renovation | Nov 8, 2022
Renovation work outpaces new construction for first time in two decades
Renovations of older buildings in U.S. cities recently hit a record high as reflected in architecture firm billings, according to the American Institute of Architects (AIA).
Sponsored | Steel Buildings | Nov 7, 2022
Steel structures offer faster path to climate benefits
Faster delivery of buildings isn’t always associated with sustainability benefits or long-term value, but things are changing. An instructive case is in the development of steel structures that not only allow speedier erection times, but also can reduce embodied carbon and create durable, highly resilient building approaches.
Building Team | Nov 7, 2022
U.S. commercial buildings decreased energy use intensity from 2012 to 2018
The recently released 2018 Commercial Buildings Energy Consumption Survey (CBECS) by the U.S. Energy Information Administration found that the total floorspace in commercial buildings has increased but energy consumption has not, compared with the last survey analyzing the landscape in 2012.
Sports and Recreational Facilities | Nov 7, 2022
Gilbane, Turner, Populous tapped to design and build new Buffalo Bills stadium
The joint venture of Gilbane Building Company and Turner Construction Company, in association with 34 Group, has been selected to provide construction management of the planned new NFL stadium for the Buffalo Bills in Orchard Park, N.Y. The project team also includes the project management firm, Legends Project Development, and Populous as the designer.
| Nov 7, 2022
Mixed-use tower in China features world’s highest outdoor pool
Guangxi China Resources Tower, a new 403-meter-tall (1,322 feet) skyscraper in Nanning, China features the world’s highest outdoor pool—at 323 meters (1,060 feet) above grade.
Building Team | Nov 3, 2022
More than half of U.S. contractors say finding skilled workers is big barrier to their growth
More than half of U.S. contractors (55%) say finding enough skilled workers is one of the biggest barriers to growing their business, according to a DEWALT Powering the Future Survey.
