Nonresidential fixed investment fell by 0.6% during the second quarter after expanding by 1.6% during the first quarter, according to the July 30 real gross domestic product (GDP) report by the Bureau of Economic Analysis (BEA).
For the economy as a whole, real GDP expanded by 2.3% (seasonally adjusted annual rate) during the second quarter following a 0.6% increase during the year's first quarter. Note that the first quarter estimate for nonresidential fixed investment was revised upward from -3.4% annualized growth.
"In the first half of 2015, both the broader economy and nonresidential investment lost the momentum they had coming into the year," said Associated Builders and Contractors Chief Economist Anirban Basu. "Rather than indicating renewed progress in terms of achieving a more robust recovery, today's GDP release indicates that a variety of factors helped to stall investment in nonresidential structures. There are many viable explanations, including a weaker overall U.S. economy, a stronger U.S. dollar, decreased investment in structures related to the nation's energy sector, soft public spending, and uncertainty regarding monetary policy and other abstracts of public policy. While the expectation is that the second half of the year will be better, unfortunately not much momentum is being delivered by the year's initial six months.
"Perhaps the most salient facet of this GDP release was the revisions," said Basu. "The BEA revised the first quarter estimate upward from -0.2% to 0.6% annualized growth. This is not surprising; many economists insisted that the economy did not shrink in the first quarter. However, the BEA also downwardly revised growth figures from the fourth quarter of 2011 to the fourth quarter of 2014. Over that period, GDP increased at an average annual rate of 2.1%, 0.3 percentage points lower than previously thought. These revisions could be a function of the agency's ongoing effort to tackle residual seasonality, a pattern in which seasonal adjustments led to repeated first quarter slowdowns. It will take a few more quarters to understand the full impact of the improved seasonal adjustments."
Performance of key segments during the first quarter:
- Investment in nonresidential structures decreased at a 1.6% rate after decreasing at a 7.4% rate in the first quarter.
- Personal consumption expenditures added 1.99% to GDP after contributing 1.19% in the first quarter.
- Spending on goods grew 1.1% from the first quarter.
- Real final sales of domestically produced output – minus changes in private inventories – increased 2.5% for the second quarter after a 2.5% increase in the first quarter.
- Federal government spending decreased 1.1% in the second quarter after increasing by 1.1% in the first quarter.
- Nondefense spending decreased 0.5% after expanding by 1.2% in the previous quarter.
- National defense spending fell 1.5% after growing 1% in the first quarter.
- State and local government spending grew 2% during the second quarter after a decrease of 0.8% in the first.
To view the previous GDP report, click here.
Related Stories
| Jun 25, 2014
Frank Lloyd Wright’s Spring House, Cincinnati’s Union Terminal among 11 Most Endangered Historic Places for 2014
The National Trust for Historic Preservation released its annual list of 11 Most Endangered Historical Sites in the United States for 2014.
| Jun 25, 2014
Green Building Initiative Announces New Appointments to Board
Glumac consulting engineer CEO Steve Straus and Plum Creek director of real estate Doug Cole join GBI's board of directors.
| Jun 24, 2014
Mayor Rahm Emanuel announces plans for a Chicago Architecture Biennial
Chicago's mayor Rahm Emanuel announces plan to hold the Chicago Architecture Biennial in late 2015, intended to rival Venice's Biennale.
| Jun 24, 2014
Intuit begins work on LEED Platinum campus addition
Demolition will begin this week as a precursor to construction of Intuit's new addition to its Mountain View, Calif., campus. The first of two additions, a 185,000-sf building on Marine Way, is expected to begin construction in August.
| Jun 23, 2014
5 new designs unveiled for Make It Right homes at Fort Peck, Mont.
Make It Right, Brad Pitt's foundation that builds homes for people in need, has just revealed five new designs for the Fort Peck (Mont.) Indian Reservation.
| Jun 23, 2014
Gehry's 'glass sail' cultural center for Foundation Louis Vuitton set to open in October
Comissioned by Bernard Arnault, American legendary architect Frank Gehry's newest structure in Paris for Foundation Louis Vuitton will house eleven galleries and an auditorium for performing arts.
| Jun 23, 2014
Lilker Associates launches Lighting Group; David Cyr announced as Director
New division rounds out building systems services offerings for the Manhattan-based consulting firm.
| Jun 23, 2014
Berlin House of One will accommodate Muslims, Jews, and Christians
The building will rise on the ruins of a 13th-century Christian church that was damaged during WWII and eventually demolished.
| Jun 22, 2014
5 ways to improve your firm’s branding efforts
Establishing, conveying, and maintaining a powerful brand is a critical component of an AEC firm’s marketing strategy. Here are five strategies to make a greater impact with your firm’s branding efforts.
| Jun 20, 2014
CM firm Gafcon promotes Ron Takaki to VP/Project Operations
Executive holds more than 35 years experience in leading architectural, engineering, construction teams in large, complex project designs
