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
| Dec 27, 2014
'Core-first' construction technique cuts costs, saves time on NYC high-rise project
When Plaza Construction first introduced the concept of "core first" in managing the construction of a major office building, the procedure of pouring concrete prior to erecting a steel frame had never been done in New York City.
| Dec 23, 2014
5 tech trends transforming BIM/VDC
From energy modeling on the fly to prefabrication of building systems, these advancements are potential game changers for AEC firms that are serious about building information modeling.
| Dec 22, 2014
What Building Teams can learn from home builders' travails
Commercial and residential construction can be as different as night and day. But as one who covered the housing industry for nearly a decade, I firmly believe AEC firms can learn some valuable lessons from the trials and tribulations that home builders experienced during the Great Recession, writes BD+C's John Caulfield.
| Dec 22, 2014
Skanska to build Miami’s Patricia and Phillip Frost Museum of Science
Designed by Grimshaw Architects, the 250,000-sf museum will serve as an economic engine and cultural anchor for Miami’s fast-growing urban core.
| Dec 22, 2014
Studio Gang to design Chicago’s third-tallest skyscraper
The first U.S. real-estate investment by The Wanda Group, owned by China’s richest man, will be an 88-story, 1,148-ft-tall mixed-use tower designed by Jeanne Gang.
| Dec 19, 2014
Zaha Hadid unveils dune-shaped HQ for Emirati environmental management company
Zaha Hadid Architects released designs for the new headquarters of Emirati environmental management company Bee’ah, revealing a structure that references the shape and motion of a sand dune.
| Dec 18, 2014
International Parking Institute and Green Parking Council collaborate with GBCI
The new collaboration recognizes importance of sustainable parking facility design and management to the built environment.
| Dec 18, 2014
In response to ultra-open and uber-collaborative office environments
Susan Cain’s bestselling 2012 book, "Quiet: The Power of Introverts in a World That Can’t Stop Talking" has made an impact on how we understand our current workforce, recognizing that at least one-third of the people we work with are introverts, writes SRG Partnership's Susan Gust.
| Dec 17, 2014
USGBC announces 2014 Best of Green Schools honorees
Houston's Monarch School was named the K-12 school of the year, and Western Michigan University was honored as the top higher-ed institution, based on environmental programs and education efforts.
| Dec 17, 2014
ULI report looks at growing appeal of micro unit apartments
New research from the Urban Land Institute suggests that micro units have staying power as a housing type that appeals to urban dwellers in high-cost markets who are willing to trade space for improved affordability and proximity to downtown neighborhoods.
