Ai-driven equipment demand surpasses decades-old growth rates

U.S. businesses continued to invest heavily in equipment in September, sustaining a surge in demand for manufactured goods driven by the AI infrastructure boom. The demand for AI-related equipment has grown at a pace not seen in recent decades, with new orders for durable goods rising 1.8% in September, largely due to commercial aircraft orders. Richard de Chazal, a macro analyst at William Blair, noted that the report extends a trend seen since spring, where investment-led demand outpaces factory production capacity. Kathy Bostjancic, Nationwide's chief economist, highlighted that strong AI spending continues to fuel business investment, with spillover effects seen in capital expenditures beyond the tech sector despite higher borrowing rates and energy costs. The upcoming GDP report on Thursday will reveal how much the equipment spending boost contributed to third-quarter growth and whether rising capital goods imports offset this investment.