Real gross domestic product (GDP) expanded 2.6% (seasonally adjusted annual rate) during the fourth quarter of 2014, following a 5% increase in the third quarter, according to the Bureau of Economic Analysis Jan. 30 release. Nonresidential fixed investment grew by only 1.9% after expanding 8.9% in the third quarter. Investment in equipment declined 1.9%, while investment in nonresidential structures increased 2.6%.
"Today's headline GDP number will be broadly viewed as disappointing as many economists had expected to see a quarterly number in excess of 3%," said Associated Builders and Contractors Chief Economist Anirban Basu. "However, it is important to note that the federal spending category subtracted more than half a percentage point, which means the non-federal portion of the economy expanded faster than 3%.
"In addition to the impact of federal spending which shrank farther than expected, it is also worth noting that spending on nonresidential structures continues to climb," said Basu. "With the economic recovery persisting and with job growth accelerating, business confidence has generally been on the rise, translating into shrinking office and retail vacancy rates and rising hotel occupancy rates. All of this creates a context in which nonresidential construction spending, particularly private construction spending, is likely to expand, which is consistent with ABC's view that the nonresidential construction recovery will continue.
Source: Bureau of Economic Analysis
"Though today's release indicates that the economy enters 2015 with somewhat less momentum than had been thought, the fact of the matter is that the past nine months represents the strongest period of growth in the current recovery cycle," said Basu. "Undoubtedly, financial markets will continue to be roiled by ongoing fluctuations in input prices and uncertainties regarding the strengthening of the U.S. dollar. But with gas prices low and with job creation now brisk, consumers are likely to continue to push the U.S. economy forward in 2015."
The following segments expanded during the fourth quarter and/or contributed to GDP.
- Personal consumption expenditures added 2.9% to GDP after contributing 2.2% in the third quarter.
- Spending on goods grew 5.4% after increasing by 4.7% in the previous quarter.
- Real final sales of domestically produced output – minus changes in private inventories – increased 1.8% for the quarter after a 5% increase in the third quarter.
- Nondefense spending expanded 1.7% after increasing by 0.4% in the previous quarter.
- State and local government spending expanded 1.3% during the fourth quarter after growing 1.1% in the third quarter.
- A number of key segments did not experience growth for the quarter.
- Federal government spending contracted by 7.5% in the fourth quarter following a -9.9% increase in the prior quarter.
- National defense spending declined by 12.5% after expanding by a full 16% in the third quarter.
To view the previous GDP report, click here.
Related Stories
Augmented Reality | Jun 22, 2022
Not just for POKÉMON GO anymore: how augmented reality is transforming architecture
By solving a long-standing communication problem, Augmented Reality (AR) is poised to make architecture quicker, nimbler, and more cost effective.
Healthcare Facilities | Jun 22, 2022
Arizona State University’s Health Futures Center: A new home for medical tech innovation
In Phoenix, the Arizona State University (ASU) has constructed its Health Futures Center—expanding the school’s impact as a research institution emphasizing medical technology acceleration and innovation, entrepreneurship, and healthcare education.
Market Data | Jun 22, 2022
Architecture Billings Index slows but remains strong
Architecture firms reported increasing demand for design services in May, according to a new report today from The American Institute of Architects (AIA).
Green | Jun 22, 2022
World’s largest commercial Living Building opens in Portland, Ore.
The world’s largest commercial Living Building recently opened in Portland, Ore.
Multifamily Housing | Jun 21, 2022
Two birds, one solution: Can we solve urban last-mile distribution and housing challenges at the same time?
When it comes to the development of both multifamily housing and last-mile distribution centers, particularly in metropolitan environments, each presents its own series of challenges and hurdles. One solution: single-use structures.
Libraries | Jun 21, 2022
Kingston, Ontario, library branch renovation cuts energy use to 55% of benchmark
A recent renovation of the Kingston (Ontario) Frontenac Public Library Central Branch greatly boosted energy and water efficiency while making the facility healthier and safer.
Building Materials | Jun 20, 2022
Early-stage procurement: The next evolution of the construction supply chain
Austin Commercial’s Jason Earnhardt explains why supply chain issues for the construction industry are not going to go away and how developers and owners can get ahead of project roadblocks.
Healthcare Facilities | Jun 20, 2022
Is telehealth finally mainstream?
After more than a century of development, telehealth has become a standard alternative for many types of care.
Building Team | Jun 20, 2022
Andres Caballero Appointed President of Uponor North America
Uponor Corporation (Uponor) has named Andres Caballero president of its Building Solutions – North America division and a member of the Executive Committee at Uponor.
| Jun 20, 2022
An architectural view of school safety and security
With threats ranging from severe weather to active shooters, school leaders, designers, and security consultants face many challenges in creating safe environments that allow children to thrive.
