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 today 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.
Nancy Pistorio, Foundation Chair and President of Madison Capital LLC, said, “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.”
Highlights from the Q3 update to the 2022 Outlook include:
The Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor, which is released in conjunction with the Economic Outlook, tracks 12 equipment and software investment verticals. In addition, the Momentum Monitor Sector Matrix provides a customized data visualization of current values of each of the 12 verticals based on recent momentum and historical strength. This month seven verticals are expanding/thriving, two are peaking/slowing, two are weakening/struggling, and one is recovering/emerging. Some highlights include:
The full report of the Momentum Monitor is now available here.
The Foundation produces the Equipment Leasing & Finance U.S. Economic Outlook report in partnership with economic and public policy consulting firm Keybridge Research. The annual economic forecast provides the U.S. macroeconomic outlook, credit market conditions, and key economic indicators. The Q3 report is the second update to the 2022 Economic Outlook and will be followed by one more quarterly update before the publication of the 2023 Economic Outlook in December.