U.S. Manufacturing Investment Outperforms Forecasts in November

2026-01-26 economy

Washington, Tuesday, 27 January 2026.
November’s unexpected surge in business equipment orders marks five straight months of growth, signaling manufacturing resilience that could buffer the economy against the impact of recent severe winter storms.

Investment Resilience Amidst Policy Shifts

New data released by the Commerce Department on Monday indicates that U.S. businesses are maintaining a robust appetite for investment, defying uncertainties surrounding trade policy and fiscal deadlines. Orders for non-defense capital goods excluding aircraft—a closely watched proxy for business spending plans known as “core capital goods”—rose 0.7% in November [1][4]. This increase marks the fifth consecutive month of gains for this critical metric, suggesting that the manufacturing sector sustained its momentum through the fourth quarter of 2025 [1]. The steady accumulation of capital equipment signals that corporate executives are moving forward with expansion strategies, having likely received sufficient clarity to execute investment plans that were previously shelved [1].

Aviation and Core Metrics Drive Growth

A granular analysis of the November report reveals that the transportation sector was the primary engine behind the month’s dramatic topline growth. Orders for transportation equipment jumped 14.7%, recovering sharply from a 6.3% drop the previous month [4]. This surge was almost entirely attributable to the civilian aircraft industry, where bookings spiked by an impressive 97.6% [4]. Such volatility is characteristic of the aerospace sector, where a handful of large contracts can sway monthly averages, yet the magnitude of this increase provided a substantial boost to the aggregate durable goods figures [6].

Economic Momentum Meets Winter Headwinds

This investment activity builds upon a strong third quarter in 2025, where the economy grew at a 4.4% pace and business investment in equipment expanded at a rate of 5.2% [1]. The sustained rise in capital goods orders through November suggests that this growth trajectory extended well into the year’s end. Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets, noted that while uncertainty regarding tariffs remains, executives appear to have reached a threshold of information sufficient to proceed with capital expenditures [1]. This sentiment is echoed by the data, which shows core shipments—a figure that feeds directly into GDP calculations—maintaining positive momentum [6].

Fiscal Deadlines and Future Outlook

Looking ahead, the U.S. economy must navigate not only weather-related disruptions but also looming fiscal hurdles. Congress faces a critical deadline on January 30 to pass funding legislation or risk a partial government shutdown [1]. The resolution of this fiscal standoff is pivotal for maintaining the business confidence evidenced in the November data. Despite these short-term risks, some analysts remain optimistic about the medium-term horizon. Shannon Grein, an economist at Wells Fargo, suggests that a combination of supportive fiscal policy and a less restrictive monetary environment should provide “fertile ground” for continued growth in capital spending throughout 2026 [1].

Sources

Economic Indicators Capital Goods