Equipment and software investment growth fared better than overall GDP growth in 2020 as businesses invested to adapt to the COVID-19 pandemic, and growth should remain well into positive territory in the beginning of 2021. Annual equipment and software investment will grow 7.8% in 2021, while annual U.S. GDP will grow 4.7%, according to the 2021 Equipment Leasing & Finance U.S. Economic Outlook from the Equipment Leasing & Finance Foundation.
“This update, while reflecting widely disparate performance in various segments of the economy, indicates the worst of the economic downturn appears to be in the rearview mirror — although that does not mean the road ahead is clear,” Scott Thacker, chair of the ELFF and CEO of Ivory Consulting, said. “Equipment and software investment surged to an annualized rate of 47% in Q3 after an unprecedented 28% decline in Q2. In Q3, investment levels in 11 of the 12 equipment verticals that the foundation monitors improved and nine experienced double or triple-digit growth. Prospects of widely-distributed vaccines in 2021 should
provide a boost to the economy, particularly in transportation-focused industries.”
Highlights from the 2021 Outlook
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. Momentum readings are below the five-year average in six of 12 verticals, and all 12 verticals are accelerating. 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.