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
| Mar 19, 2012
Smith Carter joins forces with Genivar
Smith Carter has a workforce of some 190 employees and designs complex buildings in challenging environments.
| Mar 19, 2012
HKS Selected for Baylor Medical Center at Waxahachie
Baylor Medical Center at Waxahachiewill incorporate advanced technology including telemedicine, digital imaging, remote patient monitoring, electronic medical records and computer patient records.
| Mar 19, 2012
Mixed-use project redefines Midtown District in Plantation, Fla.
Stiles Construction is building the residential complex, which is one of Broward County’s first multifamily rental communities designed to achieve LEED certification from the USGBC.
| Mar 16, 2012
Temporary fix to CityCenter's Harmon would cost $2 million, contractor says
By contrast, CityCenter half-owner and developer MGM Resorts International determined last year that the Harmon would collapse in a strong quake and can't be fixed in an economical way. It favors implosion at a cost of $30 million.
| Mar 16, 2012
Work on Oxnard, Calif. shopping center resumes after a three-year hiatus
Stalled since 2009, developers of the Collection at RiverPark decided to restart construction on the outdoor mall.
| Mar 16, 2012
Stego embarks on HPD Pilot Program
Vapor barrier manufacturer strives to provide better green choices to designers and builders.
| Mar 16, 2012
Marvin Windows and Doors accepting entries for fourth-annual myMarvin Architect’s Challenge
Architects in U.S. and abroad offered the chance to showcase their very best work.
| Mar 14, 2012
Hearing to decide fate of unfinished Harmon in Las Vegas under way
The testimony began with CityCenter consulting engineer Chukwuma Ekwueme methodically showing photo after photo of parts of the Harmon, where he and his team had chipped away the concrete pillars and beams to examine the steel reinforcing bars inside.
| Mar 14, 2012
Firestone names 2012 Master Contractor Award Winners
Annual award acknowledges industry’s top roofing professionals.
