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WASHINGTON, Jul 10, 2012 (GlobeNewswire via COMTEX) --
The Equipment Leasing & Finance Foundation (the Foundation) releases a new quarterly update to its 2012 Equipment Leasing & Finance U.S. Economic Outlook today. The report, which is focused on the $628 billion equipment leasing and finance industry, forecasts equipment investment and capital spending in the United States and evaluates the effects of various related and exogenous factors in play currently and into the foreseeable future. According to the Q3 Outlook, the projected growth in equipment and software investment for 2012 has slowed to 6.4 percent, down from the previous projection of 6.9 percent. The recent slowdown in economic activity indicates that equipment investment continued to lose momentum in Q2, but forward-looking indicators suggest growth will stabilize and potentially improve in the second half of the year.
"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 the Equipment Leasing and Finance Association's Monthly Leasing and Finance Index. The Outlook report and the Foundation's Monthly Confidence Index both indicate that concerns over the European debt crisis, U.S. 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," said William G. Sutton, CAE, President of the Foundation and President and CEO of the Equipment Leasing and Finance Association.
Key findings include:
- Expectations for 2012 are that investment will grow, but at a slower
rate than previous quarters. The European crisis, the slowdown in
emerging markets and regulatory and political uncertainty remain
significant headwinds for 2012.
- Looking to the second half of 2012, notwithstanding an external shock,
the U.S. is poised for growth driven by an improving housing market, a
growing manufacturing sector and pent-up demand in the consumer and
business sectors. Lower oil prices should also help support growth
during the second half of the year. The initial projection for 2013
growth in equipment and software investment is 8 percent.
- Trends in equipment investment include:
- Agriculture equipment investment is likely to decelerate in the next
three to six months.
- Computers and Software equipment investment should remain healthy, but
is likely to slow down somewhat.
- Construction equipment investment is projected to continue to grow at a
strong pace as the housing market rebounds.
- Industrial equipment investment likely grew at a below-average pace in
Q2 2012, but could pick up by late 2012 or early 2013.
- Medical equipment is likely to be relatively flat on a year-year basis.
- Transportation equipment investment should remain solidly positive, but
is unlikely to maintain the rapid growth rates of 2011.
- Credit market conditions have stabilized in the past several weeks after
fears of Greece exiting the EU caused tensions to spike. The subsequent
flight to safety by investors pushed long-term U.S. Treasury rates to
all-time lows. 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
favorable for purchasing versus leasing, as the cost of borrowing is
near record lows.
- The U.S. economy slowed in the first quarter of 2012 to an annualized
growth rate of 1.9 percent, down from 3 percent in the fourth quarter of
2011. Overall, the macro outlook for 2012 has not changed materially.
Real GDP growth is forecast at 2.2 percent, down from the previous
forecast of 2.3 percent, and inflation expectations dropped from 2.4
percent to 2.3 percent.
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 report will continue to be updated quarterly throughout 2012.
Download the full report at
www.leasefoundation.org/IndRsrcs/EO/ .
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that provides vision for the equipment leasing and finance industry through future-focused information and research. Funded through charitable individual and corporate donations, the Foundation is the only organization dedicated to future-oriented, in-depth, independent research for the leasing industry. Visit the Foundation online at
http://www.LeaseFoundation.org .
The Equipment Leasing & Finance Foundation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=12270
Follow the Foundation:
Twitter @ LeaseFoundation
Facebook: Equipment Leasing & Finance Foundation
Linked In:
http://www.linkedin.com/groups?gid=89692
This news release was distributed by GlobeNewswire,
www.globenewswire.com
SOURCE: Equipment Leasing & Finance Foundation
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