Global investment growth to stay slow

Global investment performed better than we expected in 2025, despite the policy uncertainty shock related to US tariffs. However, the trend is still weak, with G7 capital spending expected to rise just 2% this year.

What you will learn:

• US investment strength is mostly a function of the AI boom, with investment in non-AI-related sectors weak since mid-2023. There’s little evidence in the other G7 economies of AI advances giving a significant boost to investment, although some Asian economies are benefiting.
• Weak structures investment in the US and China is also dragging on global investment. US residential investment is now 11% below 2022 levels and the boom in non-residential structures has gone into reverse. In China, construction starts are still declining, down 80% from their 2019 levels.
• Money and credit developments aren’t providing much impetus for investment. While interest rates have fallen from their 2024 peaks, the scope for cuts is narrowing; bond yields are rising and credit standards are modestly tightening. Credit demand is also falling in the Eurozone but is still rising in the US.