Every year, businesses, nonprofit organizations, and government agencies throughout the U.S. spend almost $2 trillion on different capital goods and fixed business investments. This represents a significant portion of the entire U.S. economy, which is why groups like the Equipment Leasing and Finance Association do their best to predict the trends that they believe will affect the equipment leasing and financing industry each year.
Recently, the ELFA revealed their predictions for the 10 equipment acquisition trends that they expect to see in 2019.
Here are a few of the big trends they’re predicting for the coming year.
Capital spending will remain strong in 2019.
In the first half of 2018, businesses, nonprofits, and government agencies invested a lot of money into capital spending. This was due in large part to the strong American economy and the U.S. tax changes that went into effect. That spending tapered off during the second half of 2018, which led some industry analysts to worry about what that might mean for 2019. But, the ELFA believes that companies will continue investing in capital goods in 2019, albeit at a slightly lower rate than 2018. They’re predicting about 4 percent growth in equipment and software investment, which is down from the almost 8 percent growth in 2018, but growth nonetheless.
Equipment leasing and finance will continue to be the preferred payment method for most companies.
Companies are subject to higher interest rates and, due to the strong American economy, many companies are flush with cash, which might lead you to believe that demand for financing and leasing may decline. However, the ELFA believes that most companies will still continue to use equipment leasing and financing in 2019 as the preferred method when acquiring equipment and software.
Many of the most important equipment verticals will see substantial growth.
Outside of predicting that capital spending will continue to grow in 2019, the ELFA is also predicting that most of the key equipment verticals in the country will continue to see growth in the year to come. Specifically, they’re expecting to see big gains made in areas like aircraft, construction, software, ships and boats, and more.
Companies will use capital spending to gain a competitive advantage.
Companies throughout the country are constantly working to get a leg up on their competition, and the ELFA believes they’ll continue to do it in 2019 through capital spending. They’re predicting that many companies will use capital spending to invest in technological advancements like robotics and artificial intelligence to separate themselves from the pack, and create competitive advantages. They’ll also strive to make their operations more efficient overall by using capital spending in the right areas.
These are just some of the trends that the ELFA is predicting for 2019. Click here to read all 10 of the trends that they expect to see.
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