The BEA released the underlying details for the Q1 advance GDP report on Friday.
The BEA reported that investment in non-residential structures decreased at a 4.8% annual pace in Q1. This was the sixth consecutive quarterly decline (weakness in non-residential structures started before the pandemic).
Investment in petroleum and natural gas structures increased sharply in Q1 compared to Q4, but was still down 40% year-over-year.
Click on graph for larger image.
The first graph shows investment in offices, malls and lodging as a percent of GDP.
Investment in offices (blue) decreased in Q1, and was down 4.5% year-over-year.
Investment in multimerchandise shopping structures (malls) peaked in 2007 and was down about 28% year-over-year in Q1 – and at a record low as a percent of GDP. The vacancy rate for malls is still very high, so investment will probably stay low for some time.
Lodging investment decreased in Q1, and lodging investment was down 22% year-over-year.
The second graph is for Residential investment components as a percent of GDP. According to the Bureau of Economic Analysis, RI includes new single family structures, multifamily structures, home improvement, Brokers’ commissions and other ownership transfer costs, and a few minor categories (dormitories, manufactured homes).
Even though investment in single family structures has increased from the bottom, single family investment is still low, and still barely above the bottom for previous recessions as a percent of GDP.
Investment in single family structures was $375 billion (SAAR) (about 1.7% of GDP), and up 22% year-over-year.
Investment in multi-family structures increased slightly in Q1.
Investment in home improvement was at a $325 billion Seasonally Adjusted Annual Rate (SAAR) in Q3 (about 1.5% of GDP). Home improvement spending has been strong during the pandemic.