Equipment, Software Investment to Grow 5%
Investment in equipment and software is expected to grow 5% in 2015, according to the Q2 update to the 2015 Equipment Leasing & Finance U.S. Economic Outlook released by the Equipment Leasing & Finance Foundation. The Foundation lowered its 2015 equipment and software investment forecast to 5%, down from 6% growth forecast in its 2015 Annual Outlook released in December 2014. The report predicts that an overall expansion in the economy will encourage both large and small businesses to increase capital spending this year, although at a slightly slower pace than in 2014.
William G. Sutton, CAE, president of the Foundation and president and CEO of the Equipment Leasing and Finance Association, said, “The equipment finance industry has seen positive growth so far in 2015, and recent data from the Foundation’s Monthly Confidence Index and the Association’s Monthly Leasing and Finance Index point to a healthy business sector. This positive trend is expected to continue throughout the year, driven by a strengthening economy and improved business confidence. Both supply and demand for credit are growing, and although the likelihood of a Fed rate increase later this year could lead to market volatility, it may also encourage businesses to pull forward planned investments in order to lock in current rates before they rise.”
Highlights from the study include:
- Overall, GDP is expected to grow 3.1% in 2015 as the economy finally hits its stride. Several headwinds — notably the strong U.S. dollar and harsh winter storms — could limit growth in 2015, yet growth is expected to exceed 3% for the first time since 2005.
- Equipment and software investment was subdued in Q4/14, slowing from 10.5% in Q3 to just 1.6% in Q4. Growth for all of 2014, however, was still a solid 5.8%.
- Lending to businesses has steadily increased, and businesses appear poised to increase their credit demand. For both large and small businesses, steady economic growth and reduced uncertainty may translate to increased confidence about the future — and, as a result, increased demand for credit.
To view the full report, click here.