The Equipment Leasing & Finance Foundation (ELFF) has revised its expectations for investment growth to 4.2%, up from the 3.1% it forecast in December 2013.

In a Q2 update to the 2014 Annual Outlook it issued last December, the ELFF predicted that equipment and software investment will grow ‘steadily’ in the wake of recovering economic conditions and business confidence.

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Centred on the $827bn (€560bn) US equipment leasing and finance industry, the foundation’s report found credit supply and credit demand to have both rebounded.

William Sutton, president of the foundation and president and chief executive officer of the Equipment Leasing and Finance Association (ELFA), said the report was aligned with the findings of the ELFA’s recent monthly confidence and leasing and finance indices.

He said: "The Foundation’s Outlook report reflects a strengthening economy and positive trends in equipment investment.

"We know the cold winter has had some negative impact on the economy; however, with reduced policy uncertainty, stronger economic fundamentals and replacement demand, we remain optimistic about growth," he added.

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In particular, equipment and software, railroad equipment, construction machinery, materials handling equipment, and general industrial equipment are likely to see stronger investment growth later in 2014, according to the survey.

Investment in agriculture machinery, medical equipment and aircraft will witness decelerated growth, while currently slowing mining and oilfield investment looks set to pick up over the coming quarters.

Further, high replacement demand over past quarters and a focus on upgrading to new technology will spell muted investment growth in computers and software respectively over the next 3-6 months.

Overall, according to the ELFF, the U.S. economy will grow 2.8% in 2014, the fastest since the crisis.