Real gross domestic product (GDP) expanded by just 0.7% (seasonally adjusted annual rate) during the fourth quarter of 2015, according to an analysis of Bureau of Economic Analysis data released by Associated Builders and Contractors (ABC). This paltry growth follows a 2% increase during the year's third quarter and a 3.9% increase during the second quarter. For the year, GDP expanded by 2.4%, matching the rate of growth seen in 2014.
Nonresidential fixed investment shrank by 1.8% in the fourth quarter, the first time the segment has contracted since the third quarter of 2012. For the year, nonresidential fixed investment expanded by 2.9% after growing by 6.2% in 2014 and 3% in 2013.
"The economy did not end the year well," ABC Chief Economist Anirban Basu said. "Today's GDP data adds weight to the argument that the U.S. is in a corporate profits recession, an industrial recession, and was experiencing a softening of investments. With the exception of the residential building sector, business capital outlays have declined as corporations deal with a combination of sagging exports, competitive imports, declining energy related investments, rising wage pressures and healthcare costs.
"Recent turbulence in financial markets suggest that capital availability may continue to soften," Basu said. "While residential construction is likely to continue to recover given the combination of low interest rates and accelerating household formation, nonresidential construction spending growth may begin to sputter a bit as those who deploy capital become more defensive. This is not to suggest that nonresidential construction spending is set to decline. Many contractors continue to report significant and growing backlog. However, the current situation suggests that the growth in backlog and ultimately in spending may not be quite as rapid as it was earlier in 2015."
Six key input prices rose or remained unchanged in October on a monthly basis, while one remained unchanged:
- Personal consumption expenditures expanded 2.2% in the fourth quarter after growing by 3% in the third quarter.
- Spending on goods grew 2.4% in the fourth quarter after expanding 5% in the third quarter and 5.5% in the second quarter.
- Real final sales of domestically produced output increased 1.2% for the fourth quarter after a 2.7% increase in the third quarter.
- Federal government spending increased 2.7% in the fourth quarter, the segment's largest increase since the third quarter of 2014.
- Nondefense spending increased 1.4% in the fourth quarter after expanding 2.8% in the previous quarter.
- National defense spending expanded by 3.6% in the fourth quarter after contracting by 1.4% during the third.
- State and local government spending contracted by 0.6% in the fourth quarter after increasing by 2.8% in the third quarter.
Related Stories
| Jul 28, 2014
Reconstruction Sector Engineering Firms [2014 Giants 300 Report]
Jacobs, URS, and Wiss, Janney, Elstner top Building Design+Construction's 2014 ranking of the largest reconstruction engineering and engineering/architecture firms in the U.S.
| Jul 28, 2014
Reconstruction Sector Architecture Firms [2014 Giants 300 Report]
Stantec, HDR, and HOK top Building Design+Construction's 2014 ranking of the largest reconstruction architecture and architecture/engineering firms in the U.S.
| Jul 27, 2014
Top Data Center Construction Firms [2014 Giants 300 Report]
Holder, Turner, and DPR head Building Design+Construction's 2014 ranking of the largest data center contractors and construction management firms in the U.S.
| Jul 27, 2014
Top Data Center Engineering Firms [2014 Giants 300 Report]
Fluor, Jacobs, and Syska Hennessy top Building Design+Construction's 2014 ranking of the largest data center engineering and engineering/architecture firms in the U.S.
| Jul 27, 2014
Top Data Center Architecture Firms [2014 Giants 300 Report]
Gensler, Corgan, and HDR head Building Design+Construction's 2014 ranking of the largest data center architecture and architecture/engineering firms in the U.S.
| Jul 25, 2014
Grocery stores choosing Green Globes for building sustainability certification
The Green Building Initiative (GBI) has announced a wave of Green Globes certifications for new grocery stores, including New Seasons Markets, Whole Foods, Price Chopper, Aldi’s, Harris Teeter, Wegmans, and Publix.
| Jul 24, 2014
MIT researchers explore how to make wood composite-like blocks of bamboo
The concept behind the research is to slice the stalk of bamboo grass into smaller pieces to bond together and form sturdy blocks, much like conventional wood composites.
| Jul 23, 2014
Meet Acquario Ceará: The giant crustacean-shaped aquarium that's causing concerns
A new aquarium on Brazil's northeastern coast is designed, engineered, constructed and financed by U.S. firms and institutions.
| Jul 23, 2014
Architecture Billings Index up nearly a point in June
AIA reported the June ABI score was 53.5, up from a mark of 52.6 in May.
