GDP rose but structures investment fell; MHC, AIA, NABE find ongoing nonres slump

Real (net of inflation) gross domestic product increased 3.2 percentin the first quarter at a seasonally adjusted annual rate, a slowdown from the 5.6 percent gain in the fourth quarter of 2009, the Bureau of Economic Analysis reported [April 30]. Investment in structures was a major drag on GDP growth. Real investment in private nonresidential structures (including mineshafts and wells) decreased 14 percent, after dropping 18 percent in the fourth quarter. Real residential fixed investment decreased 11 percent, in contrast to an increase of 3.8 percent. Real government investment in structures dropped 16 percent, following a decline of 14 percent. Prices remained subdued for GDP and finished structures. The price indexes for GDP and private nonresidential structures each rose just 0.9 percent; for residential investment, 1.3 percent; and for government structures, 1.0 percent. The Federal Reserve's Federal Open Market Committee had noted at the conclusion of its meeting on Wednesday [April 28], "Business spending on equipment and software has risen significantly; however, investment in nonresidential structures is declining," according to an April 30 Data DIGest report.

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