The Equipment Leasing & Finance Foundation released the Q2/22 Equipment Leasing & Finance Industry Snapshot, an information resource for equipment finance industry participants. 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 with charts and short narratives of key trends.

Highlights from the Snapshot

• Overall, the ELFF projects the U.S. economy will grow by 2.8% in 2022. Growth will likely be driven by a gradual unraveling of supply chains, business investment and continued consumer spending.
• The U.S. economy expanded to a 6.9% annualized pace in Q4/21, with most of the expansion due to a buildup in inventories.
• Economic tailwinds for growth this year include:
  • A robust labor market with plentiful job openings and strong wage growth in several industries, which is providing consumers with support in the face of high inflation, falling savings and geopolitical uncertainty.
  • A healthy housing market driven by strong demand and limited inventories.
• Economic headwinds include:
  • Worsening inflation pressures, which are expected to remain high in the near term.
  • New challenges to supply chains that are already strained by the COVID-19 pandemic due to Russia’s invasion of Ukraine and COVID-related lockdowns in key Chinese industrial cities.
• Additional factors to watch include:
  • Stagflation due to persistently high inflation and expectations for slowing growth this year.
  • Action by the Federal Reserve to tamp down inflation by raising interest rates without causing a recession.
  • Geopolitical fallout of the Russian war in terms of global trade impacts and the possibility of future conflicts (e.g., China and Taiwan).
• Equipment and software investment is expected to recover during 2022 as business conditions stabilize following volatility caused by geopolitical tensions. Equipment and software investment is projected to expand by 4.2%, a slower pace than in 2021, which was the strongest year in a decade.
• New business volume growth reported in the Equipment Leasing and Finance Association’s Monthly Leasing and Finance Index eased in Q1/22 after a record year in 2021. Healthy business investment growth is expected to drive new business volume growth throughout 2022, although year-over-year growth may ease compared with the double-digit expansion last year.