Don't Be Fooled, It's Only The Energy Industry Increasing Investment In Real Estate

Don't Be Fooled, It's Only The Energy Industry Increasing Investment In Real Estate

The advance Q4 GDP report released last Friday showed a small annualized real increase of 0.8% for investment in non-residential structures. This broke a streak of nine straight quarterly declines. Note: this gain might be revised away.

With the release of underlying detail data yesterday - we can see that the reported small gain for non-residential structure investment in Q4 was mostly for power and petroleum mining structures.

If we look at just office, mall and lodging investment, non-residential structure investment continued to decline in Q4.

Image: Calculated Risk

This graph shows investment in offices, malls and lodging as a percent of GDP. Office investment as a percent of GDP peaked at 0.46% in Q1 2008 and has declined sharply to a new series low as a percent of GDP (data series starts in 1959).

from - http://www.businessinsider.com/energy-industry-real-estate-investment-2011-2