In what is likely to be challenging year for both the U.S. economy and the equipment finance industry, equipment and software investment will grow by 4.2% in 2023, according to the 2023 Equipment Leasing & Finance U.S. Economic Outlook from the Equipment Leasing & Finance Foundation. The report also forecasts sluggish U.S. GDP growth of 0.9% (annualized) due to a mild recession that is expected to begin midway through next year. The foundation’s report is focused on the $1.16 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.
“Equipment investment, the lifeblood of the equipment finance industry, has maintained steady growth since the onset of the pandemic,” Nancy Pistorio, chair of the ELFF and president of Madison Capital, said. “Despite higher interest rates, inflation and expectations of a downturn in 2023, the report indicates that a ‘soft landing’ in which the economy avoids recession is still possible. In addition, there are several factors that may make the looming downturn less severe for our industry than previous recessions, including pro-industrial legislation, equipment order backlogs and reshoring trends.”
2023 Outlook Highlights
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, one vertical is expanding, six are peaking, two are recovering and three are weakening. Over the next three to six months, year over year:
The ELFF 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 a U.S. macroeconomic outlook, credit market conditions and key economic indicators. The report will be updated quarterly throughout 2023.
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