The latest Construction Economic Update from the Associated Builders and Contractors (ABC) reported a 3.4% decline in nonresidential fixed investment during the first quarter of 2015. According to a recent gross domestic product report by the Bureau of Economic Analysis, the GDP rose by 0.2% during the same time.
This is the first time that nonresidential fixed investment declined since the first quarter of 2011, ABC reported.
Nonresidential fixed investment had been rising by more than 4% on an annualized basis during five of the previous six quarters.
Despite extreme weather across the country, nonresidential fixed investment expanded while energy prices were higher, causing the energy exploration, development, and distribution sectors to grow.
“Lower energy prices had an intense impact during the first quarter of 2015 and consumer spending was not enough to meaningfully offset the plummeting nonresidential fixed investment,” said ABC Chief Economic Anirban Basu. “Investment in equipment inched up just 0.1% and, while investment in intellectual property products expanded 7.8%, the third component, investment in structures, fell 23.1% during this year’s first quarter.”
Basu added that contractors and others in the building industry should remain positive in the continued expansion of the economy. Consumer spending is expected to pick up as the year goes on, which will help things return to normal levels during the second and third quarters of the year.
The following is first quarter performance of key segments:
- Personal consumption expenditures added 1.31% to GDP after contributing 2.98% in the fourth quarter.
- Spending on goods grew only 0.2% after a 4.8% increase in the fourth quarter.
- Real final sales of domestically products output – minus changes in private inventories – decreased 0.5% for the first quarter, after a 2.3% increase in the fourth quarter.
- Federal government spending expanded 0.3% in the first quarter following a 7.3% decrease in the prior quarter.
- Nondefense spending expanded 1.9% after increasing 1.5% in the fourth quarter of 2014.
- State and local government spending fell 1.5% during the first three months of the year after rising by 1.6% during the fourth quarter.
Related Stories
Contractors | Jul 11, 2016
Repairing the world’s infrastructure hinges on the construction sector crossing the digital divide
A new McKinsey report identifies five trends the industry should latch onto more broadly.
Contractors | Jul 4, 2016
A new report links infrastructure investment to commercial real estate expansion
Competitiveness and economic development are at stake for cities, says Transwestern.
Contractors | Jun 30, 2016
Chicago contractor found guilty of fraud on city’s requirement on minority-owned businesses
Alleged to have been sham business in bid to win city public works contract.
AEC Tech | Jun 27, 2016
If ‘only the paranoid survive,’ what does it take to thrive?
“Sooner or later, something fundamental in your business world will change.” The late Andrew Grove (1936-2016), Co-founder of tech giant Intel Corp., lived by these words.
Contractors | Jun 21, 2016
Bigness counts when it comes to construction backlogs
Large companies that can attract talent are better able to commit to more work, according to a national trade group for builders and contractors.
Building Materials | Jun 16, 2016
ABC: Construction material prices rise again in May
Nonresidential construction price gains were largely driven by iron and steel prices and steel mill product prices.
Movers+Shapers | Jun 14, 2016
VERTICAL INTEGRATOR: How Brooklyn’s Alloy LLC evolved from an architecture firm into a full-fledged development company
Led by an ambitious President and a CEO with deep pockets, Alloy LLC's six entities control the entire development process: real estate development, design, construction, brokerage, property management, and community development.
Building Team | Jun 13, 2016
BD+C launches Women in Design+Construction Conference
Inaugural 2.5-day event will convene 125+ leading AEC women in Dana Point, Calif., November 9-11, for professional development, networking, and career training.
Market Data | Jun 7, 2016
Global construction disputes took longer to resolve in 2015
The good news: the length and value of disputes in the U.S. fell last year, according to latest Arcadis report.
Market Data | Jun 3, 2016
JLL report: Retail renovation drives construction growth in 2016
Retail construction projects were up nearly 25% year-over-year, and the industrial and office construction sectors fared well, too. Economic uncertainty looms over everything, however.
