The Equipment Leasing & Finance Foundation released its Q4/20 Equipment Leasing & Finance Industry Snapshot. Designed for use in executive briefings and presentations, the presentation slide deck summarizes the current conditions and projections for the U.S. economy and equipment finance industry.
Highlights From the New Release
- The U.S. economy nosedived at an unprecedented 31.4% annualized rate in Q2/20, driven by a collapse in consumer spending, particularly in high-contact service industries. Although Q3/20’s annualized growth will be exceptionally strong given the historic contraction in Q2/20, a full recovery by the end of the year is highly unlikely.
- Investment fell 46.6% (annualized) in Q2/20, which was an unprecedented collapse. Business investment dropped 27.2% (annualized), marking the worst quarter since the 1950s.
- Equipment and software investment collapsed 27.7% (annualized) in the second quarter, which was the sharpest decline since the Great Recession. However, E&S investment is forecasted to return to positive territory during the second half of 2020.
- Among the range of COVID-19’s impacts on businesses are an expanding service industry after bottoming out in early spring, a severe effect on commercial real estate as a result of the shift to work-from-home, a resurgence in demand in the housing industry, and a thriving online retail sector as consumers shy away from in-person retail stores.
- Equipment finance industry confidence has returned to pre-pandemic levels, although public policy uncertainty remains elevated after spiking at the onset of the pandemic.
- New business volume growth reported in ELFA’s Monthly Leasing and Finance Index contracted 24% year over year in August, driven by soft demand for certain industry verticals. However, cumulative new business volume for the year is down only 4.3% from a year ago.
The Q4/20 Equipment Leasing & Finance Industry Snapshot was prepared by Keybridge Research through a commissioned grant by the Equipment Leasing & Finance Foundation.
