A new study, Future Supply Chain Impacts on the U.S. Equipment Leasing & Finance Industry, released and commissioned by the Equipment Leasing & Finance Foundation, and prepared by Zeihan on Geopolitics and Rinaldi Advisory Services, identified three major macroeconomic trends that the equipment finance industry must adapt to:

• China’s demographic collapse
• The retirement of the baby boomer generation across the globe
• The end of the globalized trade order

The study utilizes a hybrid geopolitical model to help equipment finance professionals understand the significant future headwinds facing global supply chains. Complementing the study’s perspective on geopolitical conditions and risks are high-level, action-oriented suggestions and considerations for the equipment finance industry. They include a checklist of steps to identify and mitigate risk, and insights on used equipment values, labor shortages and equipment-as-a service.

“Geopolitics hasn’t been much of a consideration for the equipment finance industry until the last couple of years. However, this study makes it clear that it is now an ongoing issue for business planning, especially regarding forward-looking origination and valuation projections by equipment type,” Tom Ware, chair of the research committee of the ELFF, said. “The researchers provide objective, tangible forecasts of equipment supply chain issues that will arise and visibility into the timing and likely locations of reshoring/onshoring of domestic manufacturing that are critical to equipment finance companies. Readers will be interested to learn why North America is likely to be a lone shining point in a global economy.”