2023 Equipment Outlook

New survey results reveal what’s hot, what’s not.

What are the hottest equipment sectors in 2023? Construction, machine tools, medical equipment, trucks/trailers and hi-tech/computers are the five top ranked. That’s according to 130 ELFA member asset managers and consultants who completed a December 2022 survey. “What’s Hot/What’s Not: Equipment Market Forecast 2023” reveals industry perceptions of 15 equipment markets based on the ELFA member survey. The following examines the top equipment types:

#1 Construction

Construction equipment was the big winner of the survey, ranking first for the 10th consecutive year. It was also one of the two types that showed an increase in net residual value sentiment. The outlook for construction remains excellent, based on pent-up demand for highway, commercial and civil projects. The infrastructure bill is an added plus to this already hot segment.    

#2 Machine Tools

Machine tools finished in second place, with a strong increase in preference from last year and the best net increase in assumed residual values of all equipment types. This ranking is believed to be linked to demand from the contract machining and allied industries. Orders increased sharply in 2021, by around 50 percent year over year, but in 2022 fell 6.7 percent lower than 2021’s record year.

#3 Medical 

This industry still suffers from confusion regarding the future of healthcare finance with changes to the on-again, off-again Affordable Care Act, and the loss of pandemic-related subsidies. The industry has a preference for leased equipment, which continues unabated, driven by demographics linked to the increasing health care needs of the baby-boom generation. U.S. healthcare spending rose an estimated 2.7 percent in 2021 accounting for 18.1 percent of GDP. 

#3 Trucks/Trailers 
(tied with Medical) 

Trucks/trailers tied with medical equipment for third place. In 2022, new class 8 sales, even though constrained, increased a solid 14.6 percent, and orders for new trailers increased by 45 percent. The outlook for this sector is good, thanks to a full backlog of orders and the need for new technology. However, this segment is the target of a host of new regulations brought about by the administration, and is still subject to labor, chip and parts supply problems that tend to limit output.

#5 Hi-Tech/Computers 

This industry continues to operate on very low margins but has a vast secondary market. After sharp increases in 2020 and 2021 due to the high number of work-from-home employees, global computer sales established a new record for decline in 2022, falling 16.5 percent (preliminary) as more system refreshes were completed. Used prices for newer PCs increased by around 10 percent in 2021, but by 2022 returned to trendline. 

Read about all 15 equipment markets by downloading the full report and an infographic from the ELFA website at www.elfaonline.org/knowledge-hub/most-popular. The report is part of ELFA’s Knowledge Hub, the source for business intelligence on the equipment finance industry.