The Equipment Leasing & Finance Foundation released the 2025 Equipment Leasing & Finance Industry Snapshot, which summarizes the current conditions and projections for the U.S. economy and equipment finance industry.
Among the wide range of details in the Q1 2025 Snapshot:
- The foundation projects that the U.S. economy will grow by 2.7%.
- The U.S. economy expanded at 2.8% (SAAR) in Q3/24, a slight decrease from 3.0% growth in Q2/24.
- Three key factors boosted the U.S. economy in 2024 and set the stage for continued economic growth in 2025: a strong labor market, rising household wealth and resilient consumer spending.
- Economic tailwinds:
- Q3/24 growth was primarily driven by consumer spending, supported by a boost in government spending and business investment.
- Economic headwinds include negative growth in private inventories, residential investment and net exports.
- Equipment and software investment is expected to grow at a 4.7% annualized pace in 2025.
- Equipment and software investment expanded 7.5% in Q3/24 (annualized) after growing 7% in Q2/24. Growth was positive in seven of 12 tracked verticals.
- Moderate growth is expected during the first half of the year with upside potential later in the year if inflation cools further toward 2%, and the Fed responds by further lowering interest rates.
- By equipment type:
- Six of 12 verticals are exhibiting recent momentum that is stronger than historical norms, including computers and mining & oilfield machinery.
- Investment growth in other industrial equipment and trucks appears set to shrink in the coming six months.
- New business volume growth reported in ELFA’s CapEx Finance Index (formerly the MLFI-25) in October was up 11.9% Y/Y, 5.1% M/M, and up 3.7% YTD, outpacing the rate of inflation.
- Special Topic – Trump’s Second Term, An overview of three key policy areas in the new administration:
- Tariffs: As an economic strategy, economic consequences and retaliation and uncertainty and opportunities
- Taxes: The 2017 Tax Cuts and Jobs Act, impact of new legislation on investment and potential long-term implications
- Industrial Policy: Policy priorities are likely to shift regarding renewable energy, domestic manufacturing and infrastructure development projects, with the effect on equipment demand unclear.
Prepared by Keybridge Research, the snapshot is available for free download at https://www.leasefoundation.org/industry-resources/industry-snapshot/.
