Beyond planes: AI, data centers and rebound in vehicles drive orders

February 18, 2026

December durable goods orders fell 1.4%, less severe than expectations of a 2% drop. That follows an upwardly revised 5.4% in November. A decline in civilian aircraft orders drove the fall in orders. Data center construction boosted durables, excluding transportation, which gained almost one percent. The aerospace industry has normalized after years of setbacks and now has a strong backlog of orders.

Transportation orders fell 5.3% in December, led by a collapse in civilian aircraft orders. Despite that drop, the annual total of orders more than doubled. The largest American aircraft maker reported 165 new orders for planes in December, which matched November. January orders came up a little short with 107 aircraft. (The trend is up on orders; current backlogs could carry us well into the 2030s given the lag time on completion.)

Orders for motor vehicles and parts returned to positive territory, up 1.2%, after two months in a row of declines. The industrial production data revealed the first increase in production in motor vehicles and parts for January since October 2025. Vehicle production has steadily trended down since April 2025 - manufacturers attempted to stockpile ahead of more tariffs. The end of tax credits for electric vehicles cooled fourth quarter demand after a robust third quarter; those who wanted the tax credit bought ahead of the expiry on October 1. With an average new vehicle transaction price of around $50,000, affordability has become another issue for the industry. That has prompted a switch to used cars.

Producers and dealers have absorbed most of the impact of tariffs due to concerns about affordability. The result until now was weaker production and layoffs in the sector. Tax refunds should provide a lift to sales early in 2026, although the used market is expected to be the largest beneficiary.

The AI boom and build-out of related products and services drove up computers and electronic products by 3%. That is the strongest month in almost four years. Computers and related products and communications equipment contributed to the rise. Orders for electrical equipment increased 0.6%. (Semiconductors are not counted in durable goods orders, but related products have been strong; it is a problem with the data and suggests that the AI boom is being undercounted. Other data shortfalls are in specialized GPUs and software.)

Orders for fabricated metals expanded by almost one percent, marking six consecutive months of increases. Some of these products are used in the construction and cooling of data centers, aligning with other gains in the category. The data center construction boom is expected to continue in 2026, contributing more than $700 billion to business fixed investment. It’s likely that AI investment is being undercounted and serves as an upside risk to growth.

Nondefense capital goods orders excluding aircraft climbed 0.6% after increasing 0.8% in November. Last year was the strongest since 2022. The allowance of 100% depreciation of new investments was aimed at the tech sector and should offset some tariff effects.

Nondefense capital goods shipments excluding aircraft increased 0.9% in December following a 0.2% gain in November. Those numbers support our forecast for nonresidential fixed investment to rise 3.5% in the fourth quarter and GDP to increase around 3.6%.

Core capital goods shipments wrapped up their strongest year out of the last three, including growth in each of the last four months. The data contributes to the calculation of business fixed investment and suggests firms are bullish heading into 2026