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Moderate Industry Growth Expected Through Year's End

BY ALM Staff
October 29, 2013

In its Q4 update to the 2013 Equipment Leasing & Finance U.S. Economic Outlook, the Equipment Leasing & Finance Foundation expects investment in equipment and software to grow 3.3% in 2013. The report, which is focused on the $725 billion equipment leasing and finance industry, forecasts equipment investment and capital spending in the United States and evaluates the effects of various related and external factors in play currently and into the foreseeable future.

According to the report, the U.S. economy is largely in the same position it has been in for the past six months, with improving fundamentals weighed down by a number of headwinds resulting in subpar growth. Positive economic drivers noted in the report include a recovering housing market, inexpensive natural gas benefitting households and the industrial sector, solid auto sales, rising consumer confidence, improving credit availability for households and businesses and steady job gains. However, the report notes that a number of opposing forces, including fiscal consolidation, rising oil prices, and renewed fiscal policy tensions, continue to constrain growth.

The study showed that the U.S. economy is expected to generate positive overall growth of 1.7% in 2013. Equipment and software investment slowed from 3.1% annualized growth in Q1 2013 to just 1.0% (quarter-to-quarter annualized) in Q2. The slower growth is a reflection of broader macroeconomic difficulties and uncertainty, but also categorical revisions to the Bureau of Economic Analysis's equipment investment accounts.

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