May 14, 2008

Construction-sector downturn slows U.S. economic growth

A downturn in the U.S. construction sector accounted for a large share of the slowdown in economic growth in 2007, according to preliminary statistics released by the Bureau of Economic Analysis (BEA).

Construction’s value added – a measure of an industry’s contribution to GDP – declined 12.1 per cent in 2007, after falling 6.0 per cent in 2006.

Real estate and rental and leasing growth slowed to 2.1 per cent in 2007 from 3.4 per cent in 2006. Finance and insurance value-added fell 0.3 per cent in 2007 after rising 9.8 per cent in 2006. Mining grew less than 0.1 percent in 2007, after growing 6.1 percent in 2006.

The BEA found these four groups accounted for about one quarter of GDP last year. However, they accounted for nearly 80 per cent of the slowdown. GDP growth fell to 2.2 per cent in 2007, from 2.9 per cent in 2006.

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