Annual growth in equipment and software investment will outpace overall GDP growth in 2021, according to a report from Equipment Leasing & Finance Foundation. Its 2021 Equipment Leasing & Finance U.S. Economic Outlook calls for investment to grow by 7.8 percent, compared to GDP growth expectations of 4.7 percent.
“This update, while reflecting widely disparate performance in various segments of the economy, indicates the worst of the economic downturn appears to be in the rearview mirror—although that does not mean the road ahead is clear,” said Scott Thacker, Foundation chair and CEO of Ivory Consulting, in a prepared statement. “Equipment and software investment surged to an annualized rate of 47 percent in Q3 after an unprecedented 28 percent decline in Q2. In Q3, investment levels in 11 of the 12 equipment verticals that the Foundation monitors improved and nine experienced double or triple-digit growth. Prospects of widely-distributed vaccines in 2021 should provide a boost to the economy, particularly in transportation-focused industries.”
The report acknowledged that although equipment and software investment is forecast to grow 7.8 percent (annualized) in 2021, some industries will likely continue to struggle under the weight of the pandemic until a vaccine is widely available.
It also noted that on Main Street, the fragile equilibrium of the late summer and early fall faces another serious threat this winter. Record Covid cases and deaths have forced several major cities to impose new lockdowns, and the effects are beginning to show. Small business revenues are falling while Main Street awaits the vaccine and another targeted federal relief effort.
The Foundation produces the Equipment Leasing & Finance U.S. Economic Outlook report in partnership with economic and public policy consulting firm Keybridge Research. The annual economic forecast provides the U.S. macroeconomic outlook, credit market conditions, and key economic indicators.
Source: ELFF
