The continuation of the eurozone crisis, the
slowdown in emerging markets, and regulatory uncertainty have all
helped to stifle confidence in US equipment leasing for the second
consecutive quarter.
The latest quarterly economic outlook from the
Equipment Leasing & Finance Foundation (ELFF), the research arm
of the US leasing trade body, the Equipment Leasing & Finance
Association (ELFA), has projected 6.4% growth in equipment and
software investment for the third quarter of 2012, down from 6.9%
predicted in the previous three months.
Go deeper with GlobalData
The second-quarter growth rate published in
April was revised down from the 9% predicted for 2012 in
December.
The report said although an expectation
remains that investment will grow in 2012, it will be at a slower
rate than previous quarters and said the European crisis, the
slowdown in emerging markets and regulatory and political
uncertainty remain significant headwinds for 2012.
However, the report, which uses data from
investment trends in key equipment markets, credit market
conditions, the US macroeconomic outlook and other economic
indicators, suggested growth will stabilise and potentially improve
later in the year.
‘Cautiously optimistic’
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“As economic conditions slowly improve, demand
for business loans will continue to grow, and supply constraints
for large businesses should ease further. However, small
businesses are reportedly having some difficulties in accessing
capital. Conditions remain favourable for purchasing versus
leasing, as the cost of borrowing is near record lows,” the report
said.
The report singled out construction equipment
investment as likely to continue to grow at a strong pace as the
housing market rebounds and predicted transportation equipment
investment should remain solidly positive, but unlikely to maintain
the rapid growth rates of 2011.
ELFF also made an initial projection of 8%
growth in equipment and software investment in 2013.
William Sutton, president of the ELFF and
chief executive of ELFA, said: “The steady overall growth projected
for 2012 in the Q3 Outlook aligns with the steady year-over-year
growth in new business volume seen in
ELFA’s Monthly Leasing and Finance Index.
“The Outlook report and the ELFF’s Monthly
Confidence Index both indicate that concerns over the European debt
crisis, US unemployment and regulatory and political uncertainty
continue to hamper growth.
“However, we are cautiously optimistic that
growth will pick up in the second half of 2012 and into 2013 due to
improvements in the manufacturing and housing sectors and lower oil
prices.”
grant.collinson@vrlfinancialnews.com
