Business & Investment

GDP details for residential and commercial real estate in the fourth quarter of 2020

Along Calculated risk of 1/31/2021 11:15:00 AM

BEA has released the basic details of its Q4 preliminary GDP report.

BEA reported that investment in non-residential structures increased at an annual rate of 3.0% in the fourth quarter. This was followed by four consecutive quarterly declines (weakness began before the pandemic). On an annual basis, investment in non-residential structures was 9.5% off from 2019 to 2020.

Investment in oil and gas structures surged in the fourth quarter compared to the third quarter, but still fell 37% year-on-year. On an annual basis, investment in oil and gas structures decreased by 39% in 2020 compared to 2019.

Click the graph to see the enlarged image.

The first graph shows investment in offices, malls and accommodation as a percentage of GDP.

Investment in offices declined in the fourth quarter, down only 6.1% year-on-year.

Investment in multi-merchandising shopping structures (mall) peaked in 2007, declining about 19% year-on-year in the fourth quarter, the lowest percentage of GDP ever. The vacancy rate of the mall is still very high, so investment may remain low for some time.

Accommodation investment declined in the fourth quarter, with accommodation investment down 23% year-on-year.

All three sectors of offices, malls and hotels have been hit hard by the pandemic.

Housing investment component

The second graph is a graph of the housing investment component as a percentage of GDP. According to the Department of Economic Analysis, RI includes new single-family homes, apartments, home renovations, brokerage fees, other ownership transfer costs, and several minor categories (dormitories, manufactured homes). I will.

Investment in single-family structures has increased from the bottom, but single-family investment remains low, below the bottom of the previous recession as a percentage of GDP.

Investment in single-family homes was $ 337 billion (SAAR) (approximately 1.6% of GDP), an increase of 16.2% over the previous year.

Investment in apartments increased in the fourth quarter.

Investment in remodeling was a seasonally adjusted annual rate (SAAR) of $ 306 billion in the third quarter (approximately 1.4% of GDP). Home renovation spending was strong during the pandemic.

Note that broker fees (black) increased sharply in the second half of 2020 due to increased existing home sales, and increased 32% year-on-year in the fourth quarter.

GDP details for residential and commercial real estate in the fourth quarter of 2020

http://feedproxy.google.com/~r/CalculatedRisk/~3/dpcXAsZKPdc/q4-2020-gdp-details-on-residential-and.html GDP details for residential and commercial real estate in the fourth quarter of 2020

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