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
| Mar 1, 2012
Cornell shortlists six architectural firms for first building on tech campus
Each of the firms will be asked to assemble a team of consultants and prepare for an interview to discuss their team’s capabilities to successfully design the university’s project.
| Mar 1, 2012
Aragon Construction completes 67,000-sf build-out in NYC
Aragon constructed the space in partnership with Milo Kleinberg Design Associates, (MKDA) and the Craven Corp. as the owner’s representative.
| Mar 1, 2012
Bomel completes design-build parking complex at U.C. San Diego
The $24-million facility, which fits into a canyon setting on the university’s East Campus, includes 1,200 stalls in two adjoining garages and a soccer field on a top level.
| Mar 1, 2012
Eidco Construction bolsters Chicago office
Eldco hires Peterson and Vivoda as senior project managers.
| Mar 1, 2012
Reconstruction of L.A.’s Dunbar Hotel underway
Withee Malcolm Architects’ designs for the project include the complete renovation of the Dunbar Hotel and the Somerville Apartments I and II.
| Feb 29, 2012
C.W. Driver opens new office, appoints Castillo regional SVP
Castillo will oversee projects with new and existing clients in northern California within the areas of education, healthcare/biomedical, public sector, military contracting, entertainment, retail, corporate and hospitality.
| Feb 29, 2012
Report says BIPV glass market to reach $6.4 billion by 2016
The report analyzes the opportunities for BIPV glass products using c-Si, thin-film and OPV/DSC materials and provides eight-year forecasts in terms of MW and square footage shipped as well as forecasts of revenue generated.
| Feb 29, 2012
Construction begins on Keller Army Community Hospital addition
The 51,000 square foot addition will become the home for optometry, ophthalmology, physical therapy, and orthopedics clinics, as well as provide TRICARE office space.
| Feb 29, 2012
Carvalho appointed Shawmut Safety Director
He has been a driving force behind multiple safety-orientated initiatives at Shawmut, including Safety Week, the creation of an online safety manual, and the implementation of a new safety reporting and tracking system.
| Feb 29, 2012
Shepley Bulfinch selected to design new Children’s Hospital of Buffalo
The firm was selected because of their past experience in designing clinically complex facilities that emphasize patient- and family-centered care and operational efficiency as well as distinctive architectural forms for many other children's and women's hospitals.
