A boom in artificial intelligence and infrastructure products pushed a closely watched measure of corporate spending to a six-year high in March.
New orders for nondefense capital goods, excluding aircraft, rose 3.3% in March, accelerating from the 1.6% increase in February, the Census Bureau reported. I mentioned Wednesday (April 29).
This measure, which economists call “core capital goods,” is closely watched as a measure of business investment, according to multiple media reports.
Reuters I mentioned Wednesday that the increase in orders for core capital goods was larger than expected. Economists polled by the news organization had expected a 0.5% rise.
The report attributed the increase in corporate spending on equipment to the boom in investments in artificial intelligence and data centers that support the technology.
She added that companies may also rush to purchase equipment before prices rise or shortages occur due to the war with Iran.
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A Reuters report quoted Steven Stanleychief US economist at Santander US Capital Markets“The astonishing degree of strength during a month when companies had good reason to be cautious attests to the significant energy in business development that was bottled up last year due to policy uncertainty.”
Bloomberg I mentioned Wednesday that the rise in orders for core capital goods seen in March was the largest since mid-2020.
This increase represents a continuation of a year of “strong” capital investment that was driven by corporate spending on artificial intelligence, the report said.
Economists expect this trend to continue until the end of 2026 due to spending on artificial intelligence and the availability of more favorable tax allocations, according to a Bloomberg report.
The report was conveyed Eliza Wingereconomic expert in Bloomberg Economics“Business investment enters the second quarter with strong momentum, supported by strong AI-related spending. While geopolitical uncertainty is worth monitoring, the data does not indicate any meaningful decline in capital spending yet,” he added.
It was reported Thursday (April 23). dead It plans to cut 10% of its workforce to offset the investments it has made Artificial intelligence infrastructure. The company plans to spend between $115 billion and $135 billion this year on data centers, chips and other artificial intelligence infrastructure.
On April 20, this was announced Anthropic It has pledged to spend more than $100 billion over the next ten years Amazon Web Services AWS technologies, including Trainium and Graviton Devices.
It was reported on April 1 that he was dead, Google and Amazon Plans to spend tens of billions of dollars more on Data centers This year than they expected to meet the demand for artificial intelligence.
