Equipment group includes construction as near-term growth driver

The Washington-based Equipment Leasing & Finance Foundation is forecasting solid but moderating economic performance through the end of this year.

That outlook is primarily fueled by strong equipment and software investment and better-than-expected consumer spending, according to the foundation.

As a counterpoint, it warns that a weakening labor market and rising inflation could dampen some of those growth prospects in the coming months.

“Equipment and software investment surged during the first half of 2025,” the group says, adding 6 of 7 equipment sectors it tracks posted gains. “The main driving force behind this expansion was technology equipment and software spending fueled by [the] massive outlays from a handful of tech giants building new data centers and other artificial intelligence (AI) infrastructure,” writes the foundation.

The group has revised its overall 2025 equipment and software investment forecast to now be pegged at 9.9 percent growth (up from 6.3 percent) and has its United States GDP growth forecast rising to 2.0 percent, up from 1.3 percent.

“Equipment and software investment continues to display impressive growth, driving economic activity during a period of heightened uncertainty,” says Leigh Lytle, president of the foundation and president and CEO of the Equipment Leasing and Finance Association, also based in Washington.

“Looking ahead, while the economy may slow, the industry remains in a solid position as the combination of the AI buildout, more favorable tax treatment, lower interest rates and a pro-growth regulatory environment drive investment activity."

The foundation says equipment and software investment continues to be a bright spot in the economy, and lists construction machinery, agricultural machinery, medical equipment and industrial machinery as sectors that have experienced positive year-over-year growth.

The impact of the AI buildout is difficult to overstate. Indeed, investment in information processing equipment contributed more to economic growth than consumer spending from January to June.

Over the next six months the foundation views construction machinery investment growth as likely to increase, while industrial equipment investment growth could remain subdued and may contract.