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
| Aug 22, 2022
For Gen Z, “enhanced communication” won’t cut it
As the fastest-growing generation, Generation Z, loosely defined as those born between the mid-1990s and early 2000s, has become a hot topic in conversations surrounding workplace design.
| Aug 22, 2022
Less bad is no longer good enough
As we enter the next phase of our fight against climate change, I am cautiously optimistic about our sustainable future and the design industry’s ability to affect what the American Institute of Architects (AIA) calls the biggest challenge of our generation.
Giants 400 | Aug 21, 2022
Top 110 Architecture/Engineering Firms for 2022
Stantec, HDR, HOK, and Skidmore, Owings & Merrill top the rankings of the nation's largest architecture engineering (AE) firms for nonresidential and multifamily buildings work, as reported in Building Design+Construction's 2022 Giants 400 Report.
Giants 400 | Aug 19, 2022
2022 Giants 400 Report: Tracking the nation's largest architecture, engineering, and construction firms
Now 46 years running, Building Design+Construction's 2022 Giants 400 Report rankings the largest architecture, engineering, and construction firms in the U.S. This year a record 519 AEC firms participated in BD+C's Giants 400 report. The final report includes more than 130 rankings across 25 building sectors and specialty categories.
| Aug 19, 2022
Cuningham appoints Jacqueline Dompe as new Chief Executive Officer
Cuningham, a national design firm, is thrilled to announce the appointment of Jacqueline Dompe as the firm’s Chief Executive Officer (CEO).
| Aug 19, 2022
Future sea rise could expose 720,000 more people on East Coast to flooding
An analysis by NPR based on modeling from the National Hurricane Center for New York City, Washington, D.C., and Miami-Dade County found future sea rise could expose about 720,000 more people to damaging floods later this century.
| Aug 19, 2022
Manassas Museum renovated to reimagine a civic design & engage the community
Manassas, VA has recently added to its historic Manassas Museum.
| Aug 18, 2022
U.S. Treasury moves to boost affordable housing
The Department of the Treasury recently announced new guidance to “increase the ability of state, local, and tribal governments to use American Rescue Plan (ARP) funds to boost the supply of affordable housing in their communities,” according to a news release.
| Aug 18, 2022
The Illinois Institute of Technology restores three Mies van der Rohe buildings
With Dirk Denison Architects and Gilbane Building Company, the Illinois Institute of Technology has recently completed a $70 million housing project that has restored three Ludwig Mies van der Rohe buildings.
Multifamily Housing | Aug 17, 2022
California strip mall goes multifamily residential
Tiny Tim Plaza started out as a gas station and a dozen or so stores. Now it’s a thriving mixed-use community, minus the gas station.
