The U.S. economy grew at an annual rate of 3 percent during the third quarter of 2017, according to Associated Builders and Contractors’ (ABC) analysis of gross domestic product (GDP) data. Nonresidential fixed investment, a category that ABC says is associated with nonresidential construction activity, expanded at an annual rate of 3.9 percent.
The third quarter’s overall performance follows a second quarter during which the economy expanded at roughly the same annual rate. The back-to-back expansion represents the largest gains in two consecutive quarters registered since 2014.
“Construction firms are among the major beneficiaries of the most recent GDP report, which confirms that the U.S. economy enjoys a level of momentum not observed for several years,” says ABC chief economist Anirban Basu. “Given the stupendous rise in asset values in recent years, including commercial real estate values, many economic actors have become concerned that real estate values could stagnate or decline. That would ultimately result in diminished demand for construction services. However, today’s report should diminish the level of concern, at least in the near term, which will help extend the current positive private construction cycle.”
“Given the recent performance of financial markets, low unemployment rates, significant number of unfilled job openings, elevated consumer confidence, rising home prices and availability of credit, consumers are well positioned to continue to drive the U.S. economy forward,” adds Basu. “One of the implications is that fourth quarter GDP growth is likely to be solid. An improving global economy also should support export growth. Business spending remains stable, while public spending, including on infrastructure, remains weak.”