Business Investment a Constructive Signal Despite Uncertainty

Recent data show a notable rise in business investment, suggesting that firms are still committing resources toward productive capacity. US Capital Goods New Orders are in in an accelerating growth trend, coming in at 14.9% above the year-ago level in November 2025.

CapEx Spending Trends

US Capital Goods New Orders are one of the clearest real-time indicators of business investment intent. These orders reflect commitments to:

• Machinery and equipment

• Technology and automation

• Productive capacity expansion

Historically, this indicator functions as either a slightly leading or coincident indicator relative to Industrial Production. Growth in capital goods orders has typically been correlated with   stronger production activity and more robust demand. Conversely, persistent declines in orders have coincided with industrial slowdowns.

Indicators of capital expenditures at small businesses corroborate the positive signal, with some nuance. According to the National Federation of Independent Business (NFIB), actual  annual US Small Business Expenditures rose to 1.8%  above the year-ago level in January 2026.

Per the latest NFIB survey in January, sixty percent of small business owners reported making capital expenditures  during the second half of 2025, with expenditures in the following categories:

• 44% purchased new equipment

• 26% acquired vehicles

• 16% reported facility improvements or expansions

• 13% spent money on new fixtures and furniture

• 5% purchased new buildings or land for expansion

Looking forward, only 18% of small businesses are planning to make capital expenditures in the next six months. This is a comparatively small percentage, but our analysis suggests that spending plans can be a poor predictor of activity, particularly in recent months. If we look at the trendlines on an annual growth rate basis, we can see that actual small business capital expenditures have diverged positively from expenditure plans for the last six months.    Hard economic datapoints like our ITR Leading Indicator™ tend to correlate better with actual capital expenditures, and those datapoints suggest that mild growth overall is probable in 2026.

Strategic Implications

While volatility and risks related to economic uncertainty persist, we are seeing positive momentum in US Capital Goods New Orders and rise in US Small Business Capital Expenditures.

Have you assessed how your business is performing relative to relevant new orders data for your industry? Charting your business’ rates-of-change to the rates-of-change for relevant new orders data can help you to understand whether recent performance is due to market movements or the success or failure of certain management initiatives.

In addition, be sure to track a basket of leading indicators to plan capacity  and avoid relying on headlines that focus on pessimism. If you need help with developing a data-driven approach that works for you, reach out to us.