Nonresidential construction spending grew
0.4 percent on a monthly basis in Dec. 2014, according to the Feb. 2 release from the U.S. Census Bureau. Spending for the month totaled $627.1 billion on a seasonally adjusted, annualized basis, 5.9 percent higher than Dec. 2013. The government also upwardly revised November’s spending estimate from $617 billion to $624.8 billion and October’s figure from $623 billion to $627.4 billion.
“Despite the slight expansion indicated in today’s report, nonresidential construction lost some of its momentum during the final two months of 2014; however, this should represent only a minor dip in the industry’s momentum headed into 2015,” said Anirban Basu.
Real gross domestic product (GDP) expanded 2.6 percent
(seasonally adjusted annual rate) during the fourth quarter of 2014, following a 5 percent increase in the third quarter, according to the Bureau of Economic Analysis Jan. 30 release. Nonresidential fixed investment grew by only 1.9 percent after expanding 8.9 percent in the third quarter. Investment in equipment declined 1.9 percent, while investment in nonresidential structures increased 2.6 percent. “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 percent, however, it is also worth noting that spending on nonresidential structures continues to climb,” said Basu.
To read more analysis from Basu of the fourth quarter 2014 GDP report and the Dec. 2014 construction spending report visit ABC’s Construction Economic Update page