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
| Mar 11, 2011
Chicago office building will serve tenants and historic church
The Alter Group is partnering with White Oak Realty Partners to develop a 490,000-sf high-performance office building in Chicago’s West Loop. The tower will be located on land owned by Old St. Patrick’s Church (a neighborhood landmark that survived the Chicago Fire of 1871) that’s currently being used as a parking lot.
| Mar 11, 2011
Community sports center in Nashville features NCAA-grade training facility
A multisport community facility in Nashville featuring a training facility that will meet NCAA Division I standards is being constructed by St. Louis-based Clayco and Chicago-based Pinnacle.
| Mar 11, 2011
Slam dunk for the University of Nebraska’s basketball arena
The University of Nebraska men’s and women’s basketball programs will have a new home beginning in 2013. Designed by the DLR Group, the $344 million West Haymarket Civic Arena in Lincoln, Neb., will have 16,000 seats, suites, club amenities, loge, dedicated locker rooms, training rooms, and support space for game operations.
| Mar 10, 2011
How AEC Professionals Are Using Social Media
You like LinkedIn. You’re not too sure about blogs. For many AEC professionals, it’s still wait-and-see when it comes to social media.
| Mar 7, 2011
Sika Sarnafil announces 2010 roofing Contractor Project of the Year winners
Sika Sarnafil announced winners of its 2010 Contractor Project of the Year Competition. Twelve contractors were recognized for outstanding workmanship in completing a project using a Sika Sarnafil thermoplastic membrane for roofing or waterproofing applications. A winner and two finalists were chosen from each of four different categories: Low Slope, Steep Slope, Waterproofing and Sustainability.
| Mar 3, 2011
Webcor Builders and Shangri-La Construction form partnership
Webcor Builders and Shangri-La Construction announced today that the two general contractors have formed an exclusive partnership to pursue and provide general contracting and construction management services in select western states including California, Arizona, Nevada and Texas. The partnership, which will be named Webcor LA, will pursue construction projects across aviation, commercial real estate and tenant improvement, hospitality, institutional, healthcare, industrial, public works, and multi-family categories.
| Mar 2, 2011
Design professionals grow leery of green promises
Legal claims over sustainability promises vs. performance of certified green buildings are beginning to mount—and so are warnings to A/E/P and environmental consulting firms, according to a ZweigWhite report.
| Mar 2, 2011
How skyscrapers can save the city
Besides making cities more affordable and architecturally interesting, tall buildings are greener than sprawl, and they foster social capital and creativity. Yet some urban planners and preservationists seem to have a misplaced fear of heights that yields damaging restrictions on how tall a building can be. From New York to Paris to Mumbai, there’s a powerful case for building up, not out.
| Mar 1, 2011
How to make rentals more attractive as the American dream evolves, adapts
Roger K. Lewis, architect and professor emeritus of architecture at the University of Maryland, writes in the Washington Post about the rising market demand for rental housing and how Building Teams can make these properties a desirable choice for consumer, not just an economically prudent and necessary one.
| Feb 24, 2011
Lending revives stalled projects
An influx of fresh capital into U.S. commercial real estate is bringing some long-stalled development projects back to life and launching new construction of apartments, office buildings and shopping centers, according to a Wall Street Journal article.
