JAMES CARTER: America’s Capex Comeback

Business investment surged in the wake of Donald Trump’s re-election.

This “capex comeback” shouldn’t have come as a surprise. Trump’s election alongside a Republican Congress meant the previous administration’s failed tax-and-spend policies would soon be replaced by policies similar to those that helped the economy thrive during the first Trump term. The magnitude of the capex comeback is enormous.

As Treasury Secretary Scott Bessent recently highlighted, “Business equipment production jumped 11% (annualized) in Q2, following a massive 23% gain in Q1 — the strongest non-pandemic back-to-back growth since 1997.” (For the math-challenged among us, 1997 is nearly 30 years ago!)

Indeed, capex — what businesses spend on purchasing, maintaining, or upgrading their fixed assets, including buildings, machinery, and vehicles — is up 16.6% in the first half of 2025. This didn’t happen by accident.

Why the sudden turnaround?

In short, the future isn’t what it once was. It’s better. Allow me to explain.

It would be a severe understatement to say Kamala Harris and Donald Trump offered voters different visions of the future, based on wholly divergent policies and priorities. Perhaps never before has the contrast in a presidential election been starker.

Harris offered a continuation of the Biden administration’s endless addiction to regulation, taxes, and federal spending. Paraphrasing President Ronald Reagan, Harris’ “view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Trump, meanwhile, emphasized less regulation, lower taxes, and less federal spending. (Drain the swamp!) With Trump’s win, the outlook for economic growth and investment opportunity changed dramatically for the better. Businesses responded by investing heavily in a future that did not exist prior to his re-election.

Consider the following: