The U.S. economy grew by 2.3% in 2017, while fixed investment increased at an annual rate of 7.9%, according to an Associated Builders and Contractors (ABC) analysis of Bureau of Economic Analysis data. The economy expanded at an annual rate of 2.6% during the fourth quarter of 2017 after expanding at a 3.2% rate during the third quarter.
Nonresidential fixed investment has seen over 6% growth in three of of the four quarters in 2017.Associated Builders and Contractors
The year-end figure for GDP growth of 2.3% is up from 1.5% in 2016 but down from the 2.9% figure posted in 2015. Nonresidential fixed investment increased 4.7% in 2017, its best year since increasing 6.9% in 2014. This followed a 0.6% contraction in 2016.
“Many will look at this report and conclude that consumer spending, the largest component of the economy, drove fourth quarter growth by expanding at a 3.8% annual rate,” said ABC Chief Economist Anirban Basu. “Upon further inspection, however, the fourth quarter consumer spending missed its 3% expectation due to imports increasing at twice the rate of exports. This widening trade deficit subtracted 1.13 percentage points from fourth quarter GDP growth.
“The factors that have helped to accelerate economic growth in America remain in place, including a strengthening global economy, abundant consumer and business confidence, elevated liquidity flowing through the veins of the international financial system and deregulation,” said Basu. “Stakeholders should be aware that although many companies have announced big plans for stepped-up investment, staffing and compensation — due at least in part to the recently enacted tax cut — the plans have yet to fully manifest within the data. The implication is that the U.S. economy is set to roar in 2018.
GDP continued its quarterly expansion at the end of 2017 and was up for the year compared to 2016.Associated Builders and Contractors
