Nonresidential fixed investment fell by 0.6% during the second quarter after expanding by 1.6% during the first quarter, according to the July 30 real gross domestic product (GDP) report by the Bureau of Economic Analysis (BEA).
For the economy as a whole, real GDP expanded by 2.3% (seasonally adjusted annual rate) during the second quarter following a 0.6% increase during the year's first quarter. Note that the first quarter estimate for nonresidential fixed investment was revised upward from -3.4% annualized growth.
"In the first half of 2015, both the broader economy and nonresidential investment lost the momentum they had coming into the year," said Associated Builders and Contractors Chief Economist Anirban Basu. "Rather than indicating renewed progress in terms of achieving a more robust recovery, today's GDP release indicates that a variety of factors helped to stall investment in nonresidential structures. There are many viable explanations, including a weaker overall U.S. economy, a stronger U.S. dollar, decreased investment in structures related to the nation's energy sector, soft public spending, and uncertainty regarding monetary policy and other abstracts of public policy. While the expectation is that the second half of the year will be better, unfortunately not much momentum is being delivered by the year's initial six months.
"Perhaps the most salient facet of this GDP release was the revisions," said Basu. "The BEA revised the first quarter estimate upward from -0.2% to 0.6% annualized growth. This is not surprising; many economists insisted that the economy did not shrink in the first quarter. However, the BEA also downwardly revised growth figures from the fourth quarter of 2011 to the fourth quarter of 2014. Over that period, GDP increased at an average annual rate of 2.1%, 0.3 percentage points lower than previously thought. These revisions could be a function of the agency's ongoing effort to tackle residual seasonality, a pattern in which seasonal adjustments led to repeated first quarter slowdowns. It will take a few more quarters to understand the full impact of the improved seasonal adjustments."
Performance of key segments during the first quarter:
- Investment in nonresidential structures decreased at a 1.6% rate after decreasing at a 7.4% rate in the first quarter.
- Personal consumption expenditures added 1.99% to GDP after contributing 1.19% in the first quarter.
- Spending on goods grew 1.1% from the first quarter.
- Real final sales of domestically produced output – minus changes in private inventories – increased 2.5% for the second quarter after a 2.5% increase in the first quarter.
- Federal government spending decreased 1.1% in the second quarter after increasing by 1.1% in the first quarter.
- Nondefense spending decreased 0.5% after expanding by 1.2% in the previous quarter.
- National defense spending fell 1.5% after growing 1% in the first quarter.
- State and local government spending grew 2% during the second quarter after a decrease of 0.8% in the first.
To view the previous GDP report, click here.
Related Stories
| Jun 8, 2012
Allsteel names Kris Yates to head architectural products group
Yates is responsible for the start up, launch and ongoing sales and marketing of Allsteel’s new Beyond movable walls.
| Jun 8, 2012
Chestnut Hill College dedicates Jack and Rosemary Murphy Gulati complex
Casaccio Yu Architects designed the 11,300-sf fitness and social complex.
| Jun 7, 2012
Waterline exhibition displays visions for re-thinking the Chicago River
The designs of Waterline showcase why the Chicago River should once again be considered the city’s most important asset and sets the stage for increased awareness, education and reinvention of the River.
| Jun 7, 2012
WDMA and FMA to affiliate and integrate operations
Over the coming months both organizations will begin the process of formalizing the details of the agreement for final approval by both organizations, with the formal change expected to take effect in January 2015.
| Jun 7, 2012
Craig joins Cannon Design as associate principal
Craig will work closely with the firm's Corporate/Commercial Interiors leadership to help facilitate initiatives that strengthen awareness around workplace innovation and offer counsel on strategic workplace decisions.
| Jun 7, 2012
Stantec publishes 2011 corporate Sustainability Report
Stantec's fifth annual Sustainability Report was prepared in accordance with the internationally recognized G3.1 Sustainability Reporting Guidelines, developed by the Global Reporting Initiative.
| Jun 6, 2012
KPF designs tower for Yongsan IBD
The master plan, created by Studio Daniel Libeskind, is a dynamic urban environment containing contributions from 19 different architects practicing in diverse locations around the globe.
| Jun 6, 2012
SOM urges Chicago tenants to partner with landlords to cut energy use
Tenants can exceed building energy challenge targets recently announced by Mayor Emanuel.
| Jun 6, 2012
KLMK Group awarded contract with Parkland Health & Hospital System in Texas
KLMK will also provide planning guidance in all aspects of the project related to facility activation.
| Jun 5, 2012
Cannon Design joins forces with Peter Ellis New Cities
Peter Ellis will now lead Cannon Design's urban planning and city design practice in collaboration with the firm's executive leadership.
