Brighter Days Expected – 2021 Outlook
Emerging from one of the darkest winters in recent memory, equipment and software investment growth is expected to be robust this year as businesses invest to adapt to a post-pandemic normal. Equipment Leasing & Finance Foundation (ELFF) updated the U.S. Economic Outlook, along with Foundation-Keybridge Equipment & Software Investment Momentum Monitor.
“As we continue through 2021, Northland Capital anticipates business investment to remain strong within the industries we specialize in,” states Jerry Baker, Chief Financial Officer. “As noted, agriculture is experiencing a healthy outlook with high pricing and strong exports. Construction having the potential as the bright spot with pent-up demand and a robust housing market. Government stimulus, low interest rates, and vaccinations, are setting the table for economic expansion opportunities as the transition to a less COVID restricted world continues.”
The short-term outlook is healthy for agricultural, construction machinery, and computer investments. For a full breakdown on the momentum of industry verticals, please refer to: https://www.leasefoundation.org/momentum-monitor/
Highlights from the Q2 update to the 2021 Outlook include:
- Equipment and software investment growth forecast of 11.2 percent.
- The manufacturing sector continued to improve due to strong demand for both consumer and business goods. Supply chain backlogs and rising input prices are an increasingly significant concern.
- Warmer weather, rising vaccination rates, and the relaxation of operating restrictions offer hope that there are better days ahead.
- The Federal Reserve confirmed keeping interest rates at zero until at least 2023.
The months ahead will not be free of hiccups, but the elevated uncertainty of the past year is easing with brighter days expected. The headwinds to keep an eye on include the potential for higher inflation, the ongoing labor market recovery, and the emergence of new virus strains that could reduce the effectiveness of existing vaccines. Regardless, 2021 should be a banner year for equipment investment.
Full ELFF Outlook updates: https://www.leasefoundation.org/u-s-economic-outlook/View All News & Views