2025 Economic Outlook: Economy Remains Resilient, Though Slower Growth Expected in Q4

Equipment & Software Investment Projected to Expand 9.9% in 2025 After Robust Start to Year; GDP to Expand 2.0%

WASHINGTON, Oct. 22, 2025 (GLOBE NEWSWIRE) -- Equipment Leasing & Finance Foundation today released its Q4 update of the 2025 Equipment Leasing & Finance U.S. Economic Outlook, forecasting solid but moderating economic performance through the end of 2025. This outlook is primarily fueled by strong equipment and software investment and better-than-expected consumer spending. However, the Foundation warns that a weakening labor market and rising inflation could dampen these growth prospects in the coming months.

Equipment and software investment surged during the first half of 2025. While six of seven tracked equipment verticals posted gains, the main driving force behind this expansion was technology equipment and software spending fueled by the AI boom. Driven by the massive outlays from a handful of tech giants building new data centers and other AI infrastructure, the Foundation has revised its 2025 equipment and software investment forecast to 9.9% (up from 6.3%) and its U.S. GDP forecast to 2.0% (up from 1.3%).

“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. “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 favorable tax treatment, lower interest rates, and a pro-growth regulatory environment drive investment activity.”

Highlights from the 2025 Outlook include:

U.S. Economy: Overall, the U.S. economy continues to demonstrate resilience to the cross-currents that have characterized the last 10 months, with real GDP expanding 3.8% in Q2 after contracting -0.6% in Q1. Improvements in consumer demand this summer eased concerns of a near-term economic downturn, and another quarter of solid economic growth appears likely in Q3. At the same time, weak job growth underscores the potential need for the Fed to shore up growth by lowering interest rates over the coming months, despite worries that such a move could fuel more inflation.
Business Sentiment: Businesses remain generally optimistic with both large and small firms planning capital expenditures in the coming months. The Business Roundtable’s CEO Economic Outlook capital spending index rebounded to 77.4 in Q3, while the National Federation of Independent Businesses (NFIB) reported in September that 21% of respondents are planning capital expenditures over the next six months. Equipment finance industry surveys largely agree: in October, the Foundation’s Monthly Confidence Index held steady above the historical average for the fifth consecutive month. Additionally, ELFA’s CapEx Finance Index shows upticks in new business volume in both July and August, though year-to-date volume is 2.7% below the same period in 2024.
Equipment and Software Investment: Equipment and software investment continues to be a bright spot in the economy. Technology Equipment & Software and Transportation Equipment accounted for most of the industry’s expansion over the first half of 2025, though Construction Machinery, Agricultural Machinery, Medical Equipment, and Industrial Machinery have all 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.
Equipment Finance Industry: Positive business sentiment bodes well for the industry and suggests that demand for equipment and software investment—especially in the Technology Equipment & Software vertical—should remain healthy in the near-term, creating opportunities for financing.

The Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor, which is released in conjunction with the Economic Outlook, tracks seven equipment and software investment verticals. In addition, the Momentum Monitor Sector Matrix provides a customized data visualization of current values of each of the seven verticals based on recent momentum and historical strength. This month, two verticals are strong and accelerating, two are weak but accelerating, and three are weak and decelerating. However, because of the ongoing U.S. government shutdown, several key federal data sources used in this product are temporarily unavailable. Over the next six months the Foundation expects the following trends to materialize on a year-over-year basis:

Agriculture machinery investment growth should improve.
Construction machinery investment growth is likely to increase.
Energy and electrical equipment investment growth is likely to strengthen.
Industrial equipment investment growth should remain subdued and may contract.
Medical equipment investment growth is likely to soften.
Technology equipment and software investment growth should remain solid but may moderate somewhat.
Transportation equipment investment growth is likely to remain strong.

All Foundation studies are available for download from the Foundation’s online library at http://store.leasefoundation.org/.

ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization with a mission to advance the $1.3 trillion equipment finance sector by producing data-forward research and market outlooks, as well as cultivating the next-generation workforce through Campus to Career programs, including curriculum development and collegiate scholarships. Founded in 1989 and 100% funded through charitable donations, the Foundation drives innovation and career development for the future of the industry. www.leasefoundation.org

Media Contact: Jane Esworthy, jesworthy@elfaonline.org.

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