US economy remains resilient, though slower growth expected in Q4

The Equipment Leasing & Finance Foundation has released its Q4 update of the 2025 US Economic Outlook, projecting continued resilience in the US economy despite signs of moderation heading into the final quarter of the year. The Foundation forecasts equipment and software investment to grow 9.9% in 2025, up from its previous estimate of 6.3%, while real GDP growth is now expected to reach 2.0%, an upward revision from 1.3%.

The report credits much of this strength to robust technology and software investment – particularly tied to the ongoing artificial intelligence (AI) infrastructure boom – as well as unexpectedly strong consumer spending. However, it warns that a softening labour market and persistent inflationary pressures could limit momentum in the months ahead.#

“Equipment and software investment continues to display impressive growth, driving economic activity during a period of heightened uncertainty,” said Leigh Lytle, President of the Foundation and President & CEO of the Equipment Leasing and Finance Association (ELFA).

“Earlier concerns over moderating investment have eased in recent months, contributing to improved industry confidence. Looking ahead, while the economy may slow, the industry remains in a solid position as the combination of the AI buildout, more favourable tax treatment, lower interest rates, and a pro-growth regulatory environment drive investment activity.”

Highlights from the 2025 Outlook include:

US economy
The US economy has shown notable resilience amid ongoing global and domestic challenges. After contracting by 0.6% in Q1, real GDP rebounded to 3.8% in Q2, fuelled by improving consumer demand and robust business investment. A third consecutive quarter of solid growth appears likely, though weak job gains could prompt the Federal Reserve to consider interest rate cuts to sustain growth – a move that could risk reigniting inflation concerns.

Business sentiment
Confidence across corporate America remains upbeat. The Business Roundtable’s CEO Economic Outlook capital spending index climbed to 77.4 in Q3, while the National Federation of Independent Businesses (NFIB) reported in September that 21% of small businesses plan capital expenditures over the next six months. Similarly, the Foundation’s Monthly Confidence Index has remained above its historical average for five consecutive months, and the ELFA CapEx Finance Index showed rising new business volume in July and August, despite being 2.7% lower year-to-date compared to 2024.

Equipment and software investment
Investment in equipment and software has been a major engine of economic growth this year, led by spending in Technology Equipment & Software and Transportation Equipment. Other key categories – Construction Machinery, Agricultural Machinery, Medical Equipment, and Industrial Machinery – have all posted positive year-over-year gains.

The Foundation noted that AI-related infrastructure spending, including data centre construction and hardware procurement, has played a pivotal role in sustaining overall business investment. In fact, information processing equipment investment contributed more to US GDP growth than consumer spending in the first half of 2025.

Equipment finance industry
With solid demand for equipment and software, the equipment finance sector remains well-positioned heading into 2026. The Foundation expects financing opportunities to expand, particularly within technology-related investments, as lower borrowing costs and supportive fiscal conditions persist.

Sector outlook

The Foundation-Keybridge US Equipment & Software Investment Momentum Monitor, released alongside the report, indicates a mixed performance across seven tracked verticals. Currently, two sectors are strong and accelerating, two are weak but improving, and three are weak and decelerating.

Due to the ongoing US government shutdown, some federal data used in the analysis remains temporarily unavailable. Still, the Foundation projects the following year-over-year investment trends over the next six months:

Agricultural Machinery: Growth expected to improve
Construction Machinery: Investment likely to increase
Energy & Electrical Equipment: Strengthening growth
Industrial Equipment: Growth to remain subdued, possible contraction
Medical Equipment: Likely to soften
Technology Equipment & Software: Continued solid but moderating growth
Transportation Equipment: Growth expected to remain strong

All Foundation studies, including the full 2025 Equipment Leasing & Finance U.S. Economic Outlook, are available for download from the Foundation’s online library at store.leasefoundation.org.