The Equipment Leasing & Finance Foundation has released the Q4 2021 Equipment Leasing & Finance Industry Snapshot, an indispensable information resource for 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 clear, easy-to-digest charts and short narratives of key trends.
Among the range of details in the new release:
• Overall, the Foundation projects the U.S. economy will grow by 5.3% in 2021.
• The U.S. economy expanded at a 6.7% annualized pace in Q2 2021 as business restrictions eased, mobility surged, and consumers unleashed spending across goods and services industries. Growth in Q2 was driven by a surge in consumer spending and business investment.
• Economic tailwinds for growth this year include:
o Consumer financial cushion thanks to savings accumulated during the pandemic, which is keeping financial stress low as pandemic-era relief measures like the foreclosure and eviction moratoria expire.
o Labor demand as a historic demand for workers and relatively low levels of hiring are leading workers to negotiate better pay and working conditions.
• Economic headwinds include:
o Stalling consumer mobility with the increase of the Delta variant after a substantially improved spring and early summer. On a positive note, the Delta variant is not expected to depress mobility and spending as much as the virus did last winter.
o Supply chain pressures across the world due to disruptions from COVID-related travel and work restrictions, especially in East Asian countries. Port closures and backlogs have been particularly disruptive to supply chains, causing major delays and cancellations that are driving up prices.
• Additional factors to watch include:
o Fiscal policy uncertainty with Congress engaged in debates on various spending and budget items that carry serious economic, financial, and geopolitical consequences.
o Concerns of persistently high inflation with historically high expectations among consumers and a significant share of businesses raising prices.
o The trajectory of the pandemic if, despite the success of vaccines and some level of natural immunity among those recently infected, another surge occurs that would negatively affect consumer confidence and economic activity.
o Monetary policy with Fed watchers expecting a slow return to tighter policy conditions later this year.
• Equipment investment growth will likely slow, though remain healthy throughout the rest of 2021. Equipment and software investment is projected to expand by a robust 13.2% in 2021, a strong recovery from last year’s pandemic recession.
• New business volume growth reported in ELFA’s Monthly Leasing and Finance Index expanded 21% year over year in August. Strong business investment is expected to keep new business volume elevated through the rest of the year, though year-over-year growth may ease somewhat.
Prepared for the Foundation by Keybridge Research and updated quarterly, the snapshot is available for free download at https://www.leasefoundation.org/industry-resources/industry-snapshot/