US equipment leasing and finance industry Q4 2022 snapshot

The Equipment Leasing & Finance Foundation has released the Q4 2022 Equipment Leasing & Finance Industry Snapshot. The information resource for industry participants summarises the current conditions and projections for the US economy and equipment finance industry.

Overall, the Foundation projects the US economy will grow by 1.8% in 2022, after contracting in the first half of the year. The economy contracted mainly due to weaker inventory investment.

The labour market is the primary economic tailwind for growth this year. Unemployment is at a multi-decade low, and most sectors have regained the jobs lost early in the pandemic. However, with unemployment so low, employers are lifting wages to attract workers, which contributes to higher inflation.

Economic headwinds include global economic turmoil and a sharply slowing housing sector. Interest rates are wreaking havoc on financial markets and commodity importers, inflation is not expected to vanish in the coming months, and rising mortgage rates are crushing home prices.

Additional factors to watch include: consumer reaction to interest rate hikes and energy production and prices.

Equipment and software investment is expected to grow 5.9% in 2022 largely due to rapid growth in Q1. Rapidly-rising interest rates and a slowing economy are expected to weigh on overall E&S investment for the rest of the year, though certain end-use markets will fare better than others.

New business volume growth reported in ELFA’s Monthly Leasing and Finance Index was up 4% year-over-year in August. Robust investment growth early in the year supported NBV growth, though growth may slow later this year as inflation and interest rate hikes impact the economy.

Prepared by Keybridge Research and updated quarterly, the snapshot is available for free download at https://www.leasefoundation.org/industry-resources/industry-snapshot/