The U.S. economy grew by 2.3% in 2017, while fixed investment increased at a annual rate of 7.9%, according to an Associated Builders and Contractors (ABC) analysis of data released today by the Bureau of Economic Analysis.
The economy expanded at an annual rate of 2.6% during the fourth quarter of 2017 after expanding at a 3.2% rate during the third quarter. Nonresidential fixed investment performed similarly to overall fixed investment in the fourth quarter by increasing at a 6.8% rate. This represents the third time in the past four quarters that nonresidential fixed investment increased by at least 6.7%.
The year-end figure for GDP growth of 2.3% is up from 1.5% in 2016 but down from the 2.9% figure posted in 2015. Nonresidential fixed investment increased 4.7% in 2017, its best year since increasing 6.9% in 2014. This followed a 0.6% contraction in 2016.
“Many will look at this report and conclude that consumer spending, the largest component of the economy, drove fourth quarter growth by expanding at a 3.8% annual rate,” said ABC Chief Economist Anirban Basu. “Upon further inspection, however, the fourth quarter consumer spending missed its 3% expectation due to imports increasing at twice the rate of exports. This widening trade deficit subtracted 1.13 percentage points from fourth quarter GDP growth.
“The factors that have helped to accelerate economic growth in America remain in place, including a strengthening global economy, abundant consumer and business confidence, elevated liquidity flowing through the veins of the international financial system and deregulation,” said Basu. “Stakeholders should be aware that although many companies have announced big plans for stepped-up investment, staffing and compensation—due at least in part to the recently enacted tax cut—the plans have yet to fully manifest within the data. The implication is that the U.S. economy is set to roar in 2018.
“As always, contractors are warned to remain wary,” said Basu. “The combination of extraordinary confidence and capital can fuel excess financial leverage and spur asset price bubbles. The implication is that as contractors remain busy, there should be an ongoing stockpiling of defensive cash. That recommendation will be difficult for many contractors to implement, however, with labor shortages and materials costs rising more rapidly and slender profit margins in many construction segments.”
Related Stories
MFPRO+ Research | Aug 9, 2024
Apartment completions to surpass 500,000 for first time ever
While the U.S. continues to maintain a steady pace of delivering new apartments, this year will be one for the record books.
Contractors | Aug 1, 2024
Nonresidential construction spending decreased 0.2% in June
National nonresidential construction spending declined 0.2% in June, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.21 trillion. Nonresidential construction has expanded 5.3% from a year ago.
Office Buildings | Jul 22, 2024
U.S. commercial foreclosures increased 48% in June from last year
The commercial building sector continues to be under financial pressure as foreclosures nationwide increased 48% in June compared to June 2023, according to ATTOM, a real estate data analysis firm.
Construction Costs | Jul 18, 2024
Data center construction costs for 2024
Gordian’s data features more than 100 building models, including computer data centers. These localized models allow architects, engineers, and other preconstruction professionals to quickly and accurately create conceptual estimates for future builds. This table shows a five-year view of costs per square foot for one-story computer data centers.
Healthcare Facilities | Jul 16, 2024
Watch on-demand: Key Trends in the Healthcare Facilities Market for 2024-2025
Join the Building Design+Construction editorial team for this on-demand webinar on key trends, innovations, and opportunities in the $65 billion U.S. healthcare buildings market. A panel of healthcare design and construction experts present their latest projects, trends, innovations, opportunities, and data/research on key healthcare facilities sub-sectors. A 2024-2025 U.S. healthcare facilities market outlook is also presented.
Market Data | Jul 16, 2024
Construction spending expected to rise, despite labor and materials snags
In the first half of 2024, construction costs stabilized. And through the remainder of this year, total cost growth is projected to be modest, and matched by an overall increase in construction spending. That prediction can be found in JLL’s 2024 Midyear Construction Update and Reforecast.
Healthcare Facilities | Jul 11, 2024
New download: BD+C's 2024 Healthcare Annual Report
Welcome to Building Design+Construction’s 2024 Healthcare Annual Report. This free 66-page special report is our first-ever “state of the state” update on the $65 billion healthcare construction sector.
Contractors | Jul 9, 2024
The average U.S. contractor has 8.4 months worth of construction work in the pipeline, as of June 2024
Associated Builders and Contractors reported today that its Construction Backlog Indicator increased to 8.4 months in June, according to an ABC member survey conducted June 20 to July 3. The reading is down 0.5 months from June 2023.
Office Buildings | Jul 8, 2024
Office vacancy peak of 22% to 28% forecasted for 2026
The work from home trend will continue to put pressure on the office real estate market, with peak vacancy of between 22% and 28% in 2026, according to a forecast by Moody’s.
Apartments | Jun 25, 2024
10 hardest places to find an apartment in 2024
The challenge of finding an available rental continues to increase for Americans nation-wide. On average, there are eight prospective tenants vying for the same vacant apartment.