Consumer spending

Private fixed investment is projected to reach $16.46 trillion in 2025, representing growth of 2.3% compared to the previous year. This moderate expansion reflects businesses' cautious approach to capital expenditures amid elevated interest rates and economic uncertainty. Technology investments continue to drive much of the growth, particularly in artificial intelligence infrastructure and digital transformation initiatives. Corporate spending on data centers, cloud computing capabilities and cybersecurity systems has accelerated as companies prioritize operational resilience and competitive positioning. Manufacturing investments are showing renewed strength driven by nearshoring trends and government incentives for domestic production capabilities. However, traditional sectors including commercial real estate and heavy industrial equipment have shown restraint as companies prioritize balance sheet optimization and debt reduction in response to higher borrowing costs.

Private investment has demonstrated remarkable resilience over the past five years, navigating through unprecedented economic disruption and fundamental shifts in business operations. The period began with the pandemic severely impacting business confidence in 2020, leading to a 2.5% decline to $13.60 trillion as companies across all sectors deferred expansion plans, canceled equipment orders and focused primarily on survival and liquidity preservation. Manufacturing facilities reduced capacity utilization while service sector businesses postponed technology upgrades and facility improvements.

The recovery proved swift and robust, with investment surging 8.8% in 2021 to $14.79 trillion as businesses rapidly adapted to new operating conditions and invested heavily in technology infrastructure to support remote work capabilities and accelerated digital commerce adoption. This represented one of the strongest annual growth rates in decades, reflecting both pent-up demand from delayed 2020 projects and structural shifts toward technology-enabled business models. Companies prioritized investments in cloud computing, e-commerce platforms, and automation systems that proved essential for business continuity.

Growth has since moderated but remained consistently positive, averaging 2.8% annually from 2022 through 2024. The Federal Reserve's aggressive monetary tightening cycle beginning in 2022 created significant headwinds for interest-sensitive investments, particularly affecting real estate development, long-term equipment financing, and expansion projects requiring substantial debt funding. Despite these challenges, robust corporate earnings and historically strong cash positions enabled many companies to maintain capital investment programs, albeit at more measured and strategic levels.

The composition of investment has evolved significantly during this period, with technology and intellectual property investments gaining prominence relative to traditional physical assets. Software development, data analytics platforms, and artificial intelligence systems have captured increasing shares of corporate capital budgets. Simultaneously, supply chain resilience initiatives have driven substantial investment in domestic manufacturing capabilities, inventory management systems, and logistics infrastructure as companies sought to reduce dependency on global supply networks and improve operational flexibility.