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
| Sep 13, 2010
Second Time Around
A Building Team preserves the historic facade of a Broadway theater en route to creating the first green playhouse on the Great White Way.
| Sep 13, 2010
Palos Community Hospital plans upgrades, expansion
A laboratory, pharmacy, critical care unit, perioperative services, and 192 new patient beds are part of Palos (Ill.) Community Hospital's 617,500-sf expansion and renovation.
| Sep 13, 2010
China's largest single-phase hospital planned for Shanghai
RTKL's Los Angles office is designing the Shanghai Changzheng New Pudong Hospital, which will be the largest new hospital built in China in a single phase.
| Sep 13, 2010
World's busiest land port also to be its greenest
A larger, more efficient, and supergreen border crossing facility is planned for the San Ysidro (Calif.) Port of Entry to better handle the more than 100,000 people who cross the U.S.-Mexico border there each day.
| Sep 13, 2010
Triple-LEED for Engineering Firm's HQ
With more than 250 LEED projects in the works, Enermodal Engineering is Canada's most prolific green building consulting firm. In 2007, with the firm outgrowing its home office in Kitchener, Ont., the decision was made go all out with a new green building. The goal: triple Platinum for New Construction, Commercial Interiors, and Existing Buildings: O&M.
| Sep 13, 2010
'A Model for the Entire Industry'
How a university and its Building Team forged a relationship with 'the toughest building authority in the country' to bring a replacement hospital in early and under budget.
| Sep 13, 2010
Committed to the Core
How a forward-looking city government, a growth-minded university, a developer with vision, and a determined Building Team are breathing life into downtown Phoenix.
| Sep 13, 2010
Conquering a Mountain of Construction Challenges
Brutal winter weather, shortages of materials, escalating costs, occasional visits from the local bear population-all these were joys this Building Team experienced working a new resort high up in the Sierra Nevada.
| Sep 13, 2010
3D Prototyping Goes Low-cost
Today’s less costly 3D color printers are attracting the attention of AEC firms looking to rapidly prototype designs and communicate design intent to clients.
