A disappointing report on the nation’s economy today shows real gross domestic product (GDP) grew only 1.2 percent in the second quarter.
This follows a 0.8 percent gain in first quarter, implying that total 2016 GDP expansion might be weak. Nonresidential fixed investment fell for the third consecutive quarter.
Chief economist Anirban Basu of Associated Builders and Contractors observed, “Today’s report suggests that construction activity has stalled a bit more than thought, largely due to slowing residential investment growth and low levels of public sector investment.”
He said the 7.9 percent decline in spending on structures came despite some very positive economic circumstances, such as extremely low interest rates and foreign investment continuing to pour into U.S. commercial real estate markets.
“Only those who sell directly to consumers and certain technology firms are likely to glean some sense of satisfaction from today’s release,” said Basu. “The balance of the economy continues to disappoint, though the lack of inventory building during the second quarter may help position the economy for a bounce-back during the third.”
He added that many contractors remain busy due to previously secured work.
The full analysis by this economist is at this link.