Business Investment Orders Jump, Beating All Forecasts

Published: Tuesday, August 26, 2025 at 3:15 pm

U.S. Business Investment Shows Strength Despite Aircraft Order Dip

A key indicator of U.S. business investment experienced a significant surge in July, exceeding all expectations, according to data released by the Commerce Department. Nondefense capital goods orders, excluding aircraft, a closely monitored measure of business investment, increased by 1.1 percent last month. This growth surpassed the consensus estimate of 0.3 percent and even the most optimistic forecasts.

This positive trend in core capital goods orders was accompanied by a rise in core capital-goods shipments, which directly contribute to the nation's Gross Domestic Product (GDP). Shipments increased by 0.7 percent in July, following a 0.1 percent increase in June.

However, the overall picture of durable-goods orders presented a mixed view. Total durable-goods orders decreased by 2.8 percent to $302.8 billion. This decline was primarily attributed to a substantial drop in nondefense aircraft bookings, which fell by 32.7 percent. Transportation equipment overall experienced a 9.7 percent decrease. Motor vehicles and parts saw a modest 0.3 percent gain.

Excluding transportation, durable-goods orders actually advanced by 1.1 percent, exceeding forecasts. Orders saw gains across several major categories, including machinery (1.8 percent), primary metals (1.5 percent), computers and electronics (0.6 percent), and electrical equipment (2.0 percent). Defense capital-goods orders saw a 9.7 percent decrease.

Shipments of durable goods continued their upward trajectory, rising for the eighth consecutive month, increasing by 1.4 percent to $307.5 billion. Unfilled orders remained relatively stable at $1.469 trillion, after a series of increases over the past year. Inventories saw a 0.3 percent increase to $590.8 billion.

Year-to-date, durable-goods orders are up 7.3 percent compared to the same period in the previous year, driven by a 19 percent rise in transportation equipment. Core capital goods orders are up 2.3 percent year to date.

BNN's Perspective:

While the drop in aircraft orders presents a cautionary note, the robust performance of core capital goods orders and shipments suggests underlying strength in the U.S. economy. The broad-based gains across various sectors, excluding transportation, are encouraging. This data indicates that businesses are still investing, which is a positive sign for future economic growth.

Keywords: business investment, durable goods orders, capital goods, GDP, economic growth, aircraft orders, manufacturing, economy, shipments, unfilled orders

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