Investment in equipment and software is projected to expand 4.1 percent in 2019, according to the 2019 Equipment Leasing & Finance U.S. Economic Outlook released by the Equipment Leasing & Finance Foundation. Specifically, construction machinery investment growth should hold steady during the next three to six months, while materials handling equipment investment is likely to expand at a moderate rate and software investment growth should remain solid.

Looking back, equipment and software investment increased at a robust rate in the first half of 2018, driven by more preferable tax treatment and a general upswing in the U.S. economy. However, growth slowed in the third quarter and recent data point to a continuation of this trend, providing a weak jumping off point for 2019. The outlook report also contends the strong growth achieved in Q2 and Q3 2018 is unlikely to be repeated in 2019 as headwinds build.

And while capital spending experienced moderate growth in 2018, equipment and software investment waned during the course of the year. As such, investment growth may continue to fade next year as the business cycle matures.