The equipment leasing and finance industry is poised for a rebound in 2017 following a lackluster year marked by uncertainty around the presidential election, according to the 2017 forecast by the Equipment Leasing & Finance Foundation.
In fact, 2016 went out with a bang. The December Monthly Confidence Index increased sharply to 67.5 from the November index of 54.6, a result of post-election optimism expressed by equipment finance executives.
When asked to assess their business conditions over the next four months, 48.4 percent of executives responding said they believe business conditions will improve over the next four months, an increase from 13.8 percent in November.
2017 Economic Outlook
From a broader economic perspective, labor markets were 2016's bright spot, and a continued labor market strength is likely to drive 2017 gains in wages, income, consumption and housing growth, the forecast says.
"Business investment and manufacturing activity were 2016’s big disappointments, but most indicators suggest that investment is emerging from a trough and should improve in the coming months," the report says. "Overall, the economy is well-positioned for decent GDP growth in 2017."
The energy sector, which has been a major drag on growth for several quarters, is no longer in a freefall and should be one of the improving sectors in 2017. Learn more about financing energy equipment, including water infrastructure, here.
For 2017, the Equipment Leasing & Finance Foundation expects the U.S. economy to grow 2.7 percent while equipment and software investment should expand by about 3 percent.
Capital spending also is expected to trend upward in 2017, according to the report.
"Recovering business confidence, stabilizing energy prices, and consistent consumer demand should help business investment rebound in 2017," the report says. "Credit market conditions are healthy and should not inhibit business investment or the equipment finance industry. Overall, we expect a -1.1% contraction in equipment and software investment growth for 2016, and a 3.0% expansion in 2017."
Read the full forecast here.