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
Museums | Oct 25, 2022
Seattle Aquarium’s new Ocean Pavilion emphasizes human connection to oceans
Seattle Aquarium’s new Ocean Pavilion, currently under construction, features several exhibits that examine the human connection with the Earth’s oceans.
Energy-Efficient Design | Oct 24, 2022
Roadmap shows how federal buildings can reach zero embodied carbon emissions by 2050
The Rocky Mountain Institute (RMI) has released a roadmap that it says charts a path for federal buildings projects to achieve zero embodied carbon emissions by 2050.
Higher Education | Oct 24, 2022
Wellesley College science complex modernizes facility while preserving architectural heritage
A recently completed expansion and renovation of Wellesley College’s science complex yielded a modernized structure for 21st century STEM education while preserving important historical features.
Transportation & Parking Facilities | Oct 20, 2022
How to comply with NYC Local Law 126 parking garage inspection rules
Effective January 1, 2022, New York City requires garage owners to retain a specially designated professional engineer to conduct an assessment and file a report at least once every six years. Hoffmann Architects + Engineers offers tips and best practices on how to comply with NYC Local Law 126 parking garage inspection rules.
Mixed-Use | Oct 20, 2022
ROI on resilient multifamily construction can be as high as 72%
A new study that measured the economic value of using FORTIFIED Multifamily, a voluntary beyond-code construction and re-roofing method developed by the Insurance Institute for Business & Home Safety (IBHS), found the return can be as high as 72%.
40 Under 40 | Oct 19, 2022
Meet the 40 Under 40 class of 2022
Each year, the editors of Building Design+Construction honor 40 architects engineers, contractors, and real estate developers as BD+C 40 Under 40 awards winners. These AEC professionals are recognized for their career achievements, passion for the AEC profession, involvement with AEC industry organizations, and service to their communities.
BAS and Security | Oct 19, 2022
The biggest cybersecurity threats in commercial real estate, and how to mitigate them
Coleman Wolf, Senior Security Systems Consultant with global engineering firm ESD, outlines the top-three cybersecurity threats to commercial and institutional building owners and property managers, and offers advice on how to deter and defend against hackers.
Designers | Oct 19, 2022
Architecture Billings Index moderates but remains healthy
For the twentieth consecutive month architecture firms reported increasing demand for design services in September, according to a new report today from The American Institute of Architects (AIA).
Building Team | Oct 18, 2022
Brasfield & Gorrie chairman’s home vandalized by anti-development activists
Activists vandalized the home and vehicles of Miller Gorrie, chairman of Birmingham-based Brasfield & Gorrie, in protest of a planned $90 million, 85-acre police, fire and public safety training center in Atlanta.
Mixed-Use | Oct 18, 2022
Mixed-use San Diego tower inspired by coastal experience and luxury travel
The new 525 Olive mixed use San Diego tower was inspired by the coastal experience and luxury travel.