April 30, 2014
Residential construction fell at a 5.7 percent annual rate, subtracting 0.18 from growth in the quarter. Weather likely played a big role in this, as many starts were put off in the Midwest and Northeast. While construction will be contributing to growth in future quarters there will not be a big rebound. While it had averaged close to 4.5 percent of GDP in pre-bubble years (compared to around 3.0 percent now), its longer-term level is likely to be closer to 4.0 percent of GDP. This is partly due to demographics and partly due to growing cost of health care.
For more, see the latest GDP Byte.