This is the bullish signal we've been waiting for

Six years into the recovery from the financial crisis, to say the U.S. economy is on the rise isn't enough. At this point, much of the data trotted out doesn't surprise. Existing home sales are climbing. The Federal Reserve reported that industrial production increased from April to June at the highest pace in almost four years. Jobless claims are falling, and the unemployment rate is at a six-year low.

So is America's economy finally getting on track? One look at the latest YPO Global Pulse Confidence Index provides arguably the best reason to be bullish, precisely because it's based on a data point we've been anxiously waiting to see join the recovery: a big increase in capital spending.

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Nearly half of U.S. CEOs intend to increase capital expenditures in excess of 10 percent over the next 12 months, according to the quarterly YPO Global Pulse survey. That's a significant change from the same survey conducted one year ago, when 40 percent of CEOs said they planned to increase capital expenditures in excess of 10 percent.

This is a subtle but important trend, especially since orders for U.S. business equipment (which are considered a proxy for future business spending) have declined 0.9 percent over the past three months, raising some concern about economic growth in the current quarter. Moreover, economists at the International Monetary Fund just lowered their forecast for U.S. GDP growth for 2014 down to 1.7 percent, while maintaining a 3.0 percent projection for U.S. GDP growth in 2015.

The fact that CEOs across all sectors and across large-, mid- and small-cap companies all anticipate investing more in capital equipment in the coming 12 months is a bullish call on corporate America by its respective leaders—the individuals with the courtside seats at the game and the best-informed vantage points from which to assess what might unfold in the year ahead.

It's a critical piece of the economic recovery puzzle. In a typical economic recovery, rapid sales growth from the bottom gives CEOs enough confidence to not only hire new employees but also increase their capital spending as their confidence in the long-term outlook for their businesses improves. This capital spending sets the stage for durable, broad-based economic activity as it furthers the job and wage growth that is needed to increase consumer spending on goods and services—the 70 percent backbone of U.S. GDP.

Unfortunately, this has been anything but a typical economic recovery. Here we are, six years into the recovery, and we've only recently recovered the 8.8 million non-farm payroll jobs that were lost in the recession. Bear in mind that America's population has grown since 2008, validating Fed Chairman Janet Yellen's observation that there remains job market "slack," as evidenced by anemic wage growth and a 35-year-low labor force participation rate.

Hopefully, these capital-spending intentions are carried out and will help spark the sustainable, broad-based economic recovery that has so disappointingly eluded us thus far.

—By Alan Zafran, managing director, First Republic Investment Management.

Survey Methodology
The quarterly electronic survey, conducted in the first two weeks of July, gathered answers from 2,975 chief executive officers across the globe, including 1,448 in the United States. Visit for more information about the survey methodology and results from around the world.

About YPO
CNBC and YPO (Young Presidents' Organization) have formed an exclusive editorial partnership, consisting of regional Chief Executive Networks in the Americas, EMEA and Asia-Pacific. These Chief Executive Networks are made up of a sample of YPO's unrivaled global network of 20,000 top executives from 120 countries who are on the front lines of the economy. The opinions of Chief Executive Network members are solely their own and do not reflect the opinions of YPO as a whole or CNBC.