Equipment Leasing and Finance Foundation forecasts 5.9% expansion in annualized equipment, software investment growth

Equipment Leasing and Finance Foundation forecasts 5.9% expansion in annualized equipment, software investment growth

After a strong rebound in Q1, overall equipment and software investment growth is expected to slow significantly over the remainder of the year, though demand in some end-use markets should remain healthy. The Q3 update to the 2022 Equipment Leasing & Finance U.S. Economic Outlook, released by the Equipment Leasing & Finance Foundation, forecasts equipment and software investment growth of 5.9% in 2022, while annualized GDP growth is expected to slow to 1.6% this year. The Foundation’s report is focused on the nearly $1 trillion equipment leasing and finance industry and highlights key trends in equipment investment, placing them in the context of the broader U.S. economic climate.

“As economic conditions have generally worsened over the last several months, this outlook is noticeably gloomier than the last one. The Federal Reserve is hiking rates and yet inflation continues to accelerate. However, the report also indicates there are still several important factors, such as pent-up demand, supporting growth for now for equipment finance firms and the broader economy,” Nancy Pistorio, Foundation Chair and President of Madison Capital LLC, said.

Highlights from the Q3 update to the 2022 Outlook include:

• Equipment and software investment grew 16 percent (annualized) in Q1 and demand remains strong in several end-use markets for now. However, businesses are contending with ongoing supply chain issues and rapidly rising interest rates, along with historic inflation that is threatening to derail the economy.

• Following negative GDP growth in Q1 downside risks continue to plague the U.S. economy. While the labor market is still strong and consumer spending has largely held up, the economic outlook has soured. Inflation remains the largest concern for businesses, and while the Fed is finally acting aggressively, it is likely to take several months before significant inflation abatement occurs. Another modest GDP contraction in Q2 is likely, and a looming recession in Europe means less demand for U.S. exports in Q3/Q4. Achieving the Fed’s desired “soft landing” will be challenging.

• Manufacturing output has remained strong despite a variety of headwinds facing the industry. Supply chain turmoil and high energy prices remain problematic, and rising borrowing costs are a growing concern. Still, the data point to significant pent-up demand waiting to be fulfilled should supply chains loosen later this year.

• The outlook for Main Street businesses over the remainder of the year has worsened. Small business sentiment has fallen as inflation has accelerated, and hiring has slowed. As the Fed pursues sharply tighter monetary policy to combat inflation, small businesses are likely to feel the effects of higher borrowing costs before they manifest elsewhere in the economy.

• The Fed is aggressively tightening monetary policy, which financial markets expect will continue in the coming months despite concerns of a growth pause or contraction.

You May Also Like

Volvo, Westport joint venture to reduce long haul CO2 emissions

The companies anticipate that the joint venture will become operational in Q2 of 2024.

westport-logo-volvo-reducing-carbon-dioxide-co2-emissions

The Volvo Group and Westport Fuel Systems have signed an agreement to establish a joint venture to speed up commercialization and global adoption of Westport's High Pressure Direct Injection (HPDI) fuel system technology for long-haul and off-road applications.

High Pressure Direct Injection (HPDI) is a fuel system technology which can be applied in ICE vehicles to replace greenhouse gas-emitting fuels, like diesel, with carbon-neutral or zero-carbon fuels like biogas or hydrogen, according to Volvo.

EPA finalizes Phase 3, slows stringency before MY 2032

The new emissions standards are expected to improve public health and air quality, while giving companies enough lead time to meet the goals.

EPA-emissions-trucking-generic
Kodiak and Martin Brower partner for autonomous delivery

Martin Brower and Kodiak are making 8 autonomous food deliveries per week to quick service restaurants between Dallas and Oklahoma City.

Kodiak-Robotics-Martin-Brower-autonomous-partnership
CARB’s Clean Truck Check testing pushed back to 2025

This delay is only for required inspections, meaning fleets and owner/operators are still expected to register and pay fees.

truck-lights-generic
XL Specialized names Canadian sales manager

Richard Minotti is going to step into the role, through which the company aims to broaden its reach into the Canadian market.

Richard-Minotti-Headshot-XL-Specialized-trailers

Other Posts

S&P Global Mobility: U.S. commercial truck market beat expectations

According to new CV registrations in 2023, 45% of upfitted vehicles are being used as service/utility vehicles, or as dry freight vans.

Generic-commercial-vehicle-market-data-sp-global-mobility-upfitting
Kenworth Chillicothe marks 50 years of production

Since opening its doors on March 4, 1974, Kenworth’s Chillicothe, OH plant has produced more than 782,000 trucks.

Kenworth-Chillicothe-Ohio-employees-50-year-anniversary
Mack announces 2023 Dealer of the Year winners

The Mack North American Dealer of the Year award for 2023 was presented to Nextran Truck Centers of Tuscumbia, Alabama.

Mack-Nextran-NA-Dealer-of-the-Year
Two Volvo VNR Electric trucks will kick off new California pilot program

Volvo says the VNR battery-electric trucks are ideal for drayage operations due to their operational efficiency in tight spaces.

Volvo-VNR-ONE-Electric-Truck-Program-Drayage