Equipment investment prospects brighten

Investment in equipment and software is expected to grow 5% in 2015, according to the latest update from the Equipment Leasing & Finance Foundation (ELFF), following a slow start to the year which saw demand for funding falter.

ELFA’s Q3 2015 Equipment Leasing & Finance US Economic Outlook report update predicts business confidence will improve, which should encourage greater investment over the second half of 2015, as the US economy rebounds from a disappointing Q1.

The outlook for 12 individual equipment and software verticals tracked in the report is mixed, with some sectors outperforming others. Investment in computers is likely to remain steady over the next three to six months, along with software investment.

While investment in medical equipment is identified as an area of strong growth over the same period, spending on materials handling equipment and other industrial equipment is set to slow. Agriculture machinery investment growth will likely remain weak or negative over the next three to six months, along with a lessening of demand for investment in mining and oilfield machinery.

Investment growth rates in the transport sector including aircraft, ships, railroad and trucks, is also forecast to ease according to ELFF’s update.

William G. Sutton, president of the Foundation and president and CEO of the Equipment Leasing and Finance Association, said: “Despite a weak start to the year and remaining obstacles to growth, the Foundation’s Outlook reports that a strengthening US economy bodes well for the second half of the year for equipment and software investment.

“Data from the Foundation’s Monthly Confidence Index and ELFA’s Monthly Leasing and Finance Index also reflect positive trends in equipment investment. In addition, expectations of a Fed rate increase later this year could encourage households and businesses to ‘pull forward’ investments in the coming months. The Outlook report also predicts that a steady increase in new business volume and a rising propensity to finance will drive positive growth for the equipment finance industry in 2015,” Sutton added.