Outlook Report Forecasts Rise in Investment in Equipment in 2012

Overall investment in equipment will grow by 9 percent in 2012, according to the Washington, D.C.-based Equipment Leasing & Finance Foundation’s “2012 Equipment Leasing & Finance U.S. Economic Outlook” report.  

The report, which is focused on the $628 billion equipment finance sector, forecasts equipment investment and capital spending in the United States, and evaluates the effects on various related and exogenous factors in play currently and into the foreseeable future.

Key findings include:

• Overall, investment continues to be a bright spot in the U.S. economy. In particular, investment in equipment and software has grown steadily for eight straight quarters. Expectations for 2012 are that growth will moderate slightly, but remain positive overall.

•  Trends in equipment investment include:
  • Construction equipment investment is likely to slow in the immediate near term, but could be buoyed by the energy and housing sectors later in 2012.
  • Industrial equipment investment will likely be hampered by macro-trends, which may cause some deceleration in growth from what appears to be a recent peak in the growth rate.
  • Transportation equipment investment should remain solidly positive, but is unlikely to maintain the rapid growth rates of 2011.
• Credit market conditions are improving slowly as demand for financing grows and supply constraints gradually ease. However, the growth rate of investment in equipment and software is likely to remain moderate until demand puts more pressure on capacity.  Based on an outlook for moderate economic growth in 2012, and the overhang of excess industrial capacity, investment in equipment and software is expected to increase by 8-10 percent in 2012, compared to about 10.5 percent in 2011.

The Foundation produced the 2012 Equipment Leasing & Finance U.S. Economic Outlook report in partnership with economics and public policy consulting firm Keybridge Research. The annual economic forecast provides a three-to-six-month outlook for industry investment with data, including a summary of investment trends in key equipment markets, credit market conditions, the U.S. macroeconomic outlook, and key economic indicators. The report will be updated quarterly throughout 2012.

Download the full report at www.leasefoundation.org/IndRsrcs/EO/.