Technology

Equipment Investment to Grow 6% in 2015

Software and equipment investment will maintain its momentum, growing 6% in 2015, says the Equipment Leasing & Finance Foundation.
Matthew HellerDecember 16, 2014
Equipment Investment to Grow 6% in 2015

Corporate investment in equipment and software will grow 6% next year, driven by a steadily improving economy that should gradually loosen credit constraints and increase credit demand, according to a new survey.

The Equipment Leasing & Finance Foundation’s outlook for 2015 sees a slowdown from the third quarter of this year when equipment and software investment increased 9.3% after expanding 9.6% in the second quarter.

“Although these growth rates are unlikely to be sustained in the coming months, [year-long] growth is still expected to be 5.9% in 2014 and remain relatively strong at 6.0% in 2015,” the foundation said.

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William G. Sutton, president of the foundation and CEO of the Equipment Leasing and Finance Association, said in a news release that equipment investment “has been relatively modest in recent years, but picked up in 2014 and now seems poised to maintain this momentum into 2015. Overall, these trends portend a positive result for the equipment finance industry and U.S. economy.”

The foundation believes the U.S. economy is poised to have a “breakout year” in 2015, with key “bright spots” including a rapidly improving labor market, increased access to credit, lower oil prices and fiscal healing. Meanwhile “wild cards” that could hinder growth include potential political gridlock, weakness in the global economy and geopolitical risks.

“Overall, we expect the strengthening labor market to propel [gross domestic product] growth to 3.3% in 2015, which is slightly above consensus forecasts,” the survey predicted.

The outlook over the next two quarters for individual equipment and software verticals is mixed, with investment in mining and oilfield machinery likely to slow or potentially experience negative growth due to the drop in oil prices.

Growth in other sectors, including construction machinery and railroad equipment, is expected to moderate while aircraft and computers are projected to remain relatively stable.

Featured image: Wikimedia Commons, Mixabest, CC BY-SA 3.0

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