Continued Industry Growth Expected Through Year' s End

According to the report, the U.S. economy is expected to grow 2.2% in 2014. While the economy appears to be exhibiting gradually improving health, serious downside risks remain, including geopolitical conflict, and continued accommodative monetary policy. Looking ahead, the study expects continued growth in Q3, and modest sector growth for the coming year, with an overall forecast of 5.5% growth in 2014. Credit supply continues to improve, and credit demand has held steady for all business sizes.

The study tracks 12 equipment and software investment verticals and forecasts the following equipment investment activity:

• Agriculture machinery investment will likely see year-on-year contraction through the rest of 2014, as both farm yields and commodity prices remain modest.
• Construction machinery investment is expected to experience moderate growth over the next two quarters.
• Materials handling equipment investment will likely experience stronger growth over the next three to six months.
• All other industrial equipment investment will likely see continued solid growth over the next three to six months as the “re-shoring” of manufacturing continues to be a dominant economic story in 2014.
• Medical equipment investment is expected to experience slowing growth near the end of the year.
• Mining and oilfield machinery will likely see slower growth following a strong first half of 2014.
• Aircraft investment will likely experience stronger growth towards the end of year.
• Ship and boat investment will likely slow after rebounding solidly in Q2 2014.
• Railroad equipment investment is likely to accelerate over the next three to six months.
• Investment in trucks is expected to exhibit modest growth through the year, reflecting improved economic conditions.
• Computers investment will likely remain muted following strong replacement demand seen in recent quarters.
• Software investment will likely see continued moderate growth in the next three to six months as companies continue to make investments in software and cloud technologies.

The Foundation produces the Equipment Leasing & Finance U.S. Economic Outlook report in partnership with economics and public policy consulting firm Keybridge Research. The annual economic forecast provides a three-to-six-month outlook for industry investment with data, including a summary of investment trends in key equipment markets, credit market conditions, the U.S. macroeconomic outlook and key economic indicators. The Q4 report is the third update to the 2014 Annual Outlook. The 2015 Annual Outlook will be published in December. The full report can be obtained at http://tinyurl.com/mn8mfs4.