Real gross domestic product (GDP) expanded 2.6% (seasonally adjusted annual rate) during the fourth quarter of 2014, following a 5% increase in the third quarter, according to the Bureau of Economic Analysis Jan. 30 release. Nonresidential fixed investment grew by only 1.9% after expanding 8.9% in the third quarter. Investment in equipment declined 1.9%, while investment in nonresidential structures increased 2.6%.
"Today's headline GDP number will be broadly viewed as disappointing as many economists had expected to see a quarterly number in excess of 3%," said Associated Builders and Contractors Chief Economist Anirban Basu. "However, it is important to note that the federal spending category subtracted more than half a percentage point, which means the non-federal portion of the economy expanded faster than 3%.
"In addition to the impact of federal spending which shrank farther than expected, it is also worth noting that spending on nonresidential structures continues to climb," said Basu. "With the economic recovery persisting and with job growth accelerating, business confidence has generally been on the rise, translating into shrinking office and retail vacancy rates and rising hotel occupancy rates. All of this creates a context in which nonresidential construction spending, particularly private construction spending, is likely to expand, which is consistent with ABC's view that the nonresidential construction recovery will continue.
Source: Bureau of Economic Analysis
"Though today's release indicates that the economy enters 2015 with somewhat less momentum than had been thought, the fact of the matter is that the past nine months represents the strongest period of growth in the current recovery cycle," said Basu. "Undoubtedly, financial markets will continue to be roiled by ongoing fluctuations in input prices and uncertainties regarding the strengthening of the U.S. dollar. But with gas prices low and with job creation now brisk, consumers are likely to continue to push the U.S. economy forward in 2015."
The following segments expanded during the fourth quarter and/or contributed to GDP.
- Personal consumption expenditures added 2.9% to GDP after contributing 2.2% in the third quarter.
- Spending on goods grew 5.4% after increasing by 4.7% in the previous quarter.
- Real final sales of domestically produced output – minus changes in private inventories – increased 1.8% for the quarter after a 5% increase in the third quarter.
- Nondefense spending expanded 1.7% after increasing by 0.4% in the previous quarter.
- State and local government spending expanded 1.3% during the fourth quarter after growing 1.1% in the third quarter.
- A number of key segments did not experience growth for the quarter.
- Federal government spending contracted by 7.5% in the fourth quarter following a -9.9% increase in the prior quarter.
- National defense spending declined by 12.5% after expanding by a full 16% in the third quarter.
To view the previous GDP report, click here.
Related Stories
Multifamily Housing | Aug 9, 2017
Related Companies unveils plans for One Hudson Yards luxury rental residences
The 33-story tower will be positioned on the High Line with views of the Hudson River and downtown Manhattan.
Multifamily Housing | Aug 9, 2017
Multifamily developers, designers cater to occupants’ need for mobility
Bike storage facilities and “bicycle kitchens” are among the most popular mobility amenities in multifamily developments, according to a new survey by Multifamily Design + Construction magazine.
Giants 400 | Aug 9, 2017
Innovation at 72 design firms
The following is a list of advancements architecture and A/E firms underwent in 2016, as reported in Building Design+Construction's 2017 Giants 300 Report.
Contractors | Aug 7, 2017
A Wisconsin contractor takes a personal approach to getting employees to achieve their full potential
Miron Construction’s “Dream Project” helps remove obstacles to self actualization.
Contractors | Aug 4, 2017
4 ways to prepare for a negotiation
Practice, practice, practice, and understanding both sides of the deliberation are critical to success in any negotiation.
Laboratories | Aug 3, 2017
Today’s university lab building by the numbers
A three-month study of science facilities conducted by Shepley Bulfinch reveals key findings related to space allocation, size, and cost.
Lighting | Aug 2, 2017
Dynamic white lighting mimics daylighting
By varying an LED luminaire’s color temperature, it is possible to mimic daylighting, to some extent, and the natural circadian rhythms that accompany it, writes DLR Group’s Sean Avery.
Healthcare Facilities | Aug 2, 2017
8 healthcare design lessons from shadowing a nurse
From the surprising number of “hunting and gathering” trips to the need for quiet spaces for phone calls, interior designer Carolyn Fleetwood Blake shares her takeaways from a day shadowing a nurse.
High-rise Construction | Aug 1, 2017
Construction on the world’s skinniest tower halts due to ballooning costs
The planned 82-story tower has stalled after completing just 20 stories.
Multifamily Housing | Jul 27, 2017
Apartment market index: Business conditions soften, but still solid
Despite some softness at the high end of the apartment market, demand for apartments will continue to be substantial for years to come, according to the National Multifamily Housing Council.
