Overall, the ELFF projects the U.S. economy will grow by 6.1% in 2021.
The U.S. economy expanded at a 6.4% annualized pace in Q1/21 and has fully recovered from the historic 2020 recession. Growth in Q1/21 was driven by a surge in consumer spending, business investment and government spending.
Economic tailwinds for growth this year include:
Consumer mobility, which has largely recovered to pre-pandemic levels due to falling infection rates and easing business restrictions, and spending of accumulated savings on pent-up demand for goods and services.
Firms increasing their capital investment to increase capacity and improve productivity in the face of tight labor supply and rising wages.
Economic headwinds include:
Snarled supply chains in some economic sectors, such as manufacturing, which are struggling to meet high consumer demand, in part due to the global semiconductor shortage.
Depressed services exports, which are still lagging comparable to 2019 levels.
Additional factors to watch include:
The expiration of federal enhancements to unemployment benefits in early September and how it will impact consumer spending and the labor market.
The expiration of housing support that could lead to a wave of foreclosures or evictions later this year.
Inflationary pressures and whether they will be transitory or sustained.
Equipment investment is expected to grow at a healthy, though slowing, pace for the rest of the year as businesses invest to recover or begin operations in response to strong consumer demand. Equipment and software investment is projected to expand by a robust 13.3% in 2021, the strongest year in a decade.
New business volume growth reported in the ELFA’s Monthly Leasing and Finance Index expanded 21% year over year in May. Robust business investment should keep new business volume elevated through the rest of the year.
Keybridge Research prepares the ELFF’s Equipment Leasing & Finance Industry Snapshot, which is updated quarterly.
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