The U.S. economy expanded at a 4.3% annualized pace in Q4/20 but was still 2.4% below its level at the end of 2019. Growth in the fourth quarter was driven by robust business investment, residential investment and consumer spending.
Overall, the ELFF projects the U.S. economy will grow by 5.7% in 2021.
Economic tailwinds for growth this year include:
Historic stimulus, record-high savings rates and below-trend spending, which should provide a substantial lift to consumer spending as the economy reopens this summer
The housing sector, which is benefitting from stable demand drivers like remote work and increased millennial homeownership
Economic headwinds include:
Uneven global recovery if major trading partners in regions such as Europe struggle with vaccination efforts, which will result in weak demand for U.S. exports and drag on markets such as oil and gas and industrial equipment
A weak U.S. labor market despite regaining almost half of jobs lost during the pandemic
Additional factors to watch include:
Vaccine rollout and new strains of COVID
Infrastructure spending bill
Equipment investment will likely accelerate in 2021 with improving vaccination rates and the need to invest for the new post-COVID-19 normal. Equipment and software investment is projected to expand by 11.2% in 2021.
New business volume growth reported in the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index rebounded at a strong 9% yearly pace in February, the first year-over-year improvement since the beginning of the pandemic.
The Q2 2021 Equipment Leasing & Finance Industry Snapshot is prepared by Keybridge Research and updated quarterly.
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