Snapshot of the Equipment Leasing and Finance

Transcript:Snapshot of the Equipment Leasing and Finance:
Snapshot of the Equipment Leasing and Finance Industry and U.S. Economy December 2022 Prepared For: Equipment Leasing & Finance Foundation Prepared By: Keybridge LLC Data: Table of Contents 2. Investment 3. Business Health 1. Overall Economy p. 3 2 p. 8 p. 11 Forecast Source: U.S. Bureau of Economic Analysis, Keybridge LLC 3 The economy expanded in Q3 2022 following two consecutive quarters of decline, growing 2.9% (SAAR), largely due to robust net exports. Economy 30-Year Quarterly Average = 2.6% +0.7% Real GDP Growth Annualized % Change from Prior Quarter 35.3% -29.9% The Q3 expansion was driven by a large increase in net exports and strong consumer spending, which offset a decline in business investment. 4 Source: U.S. Bureau of Economic Analysis, Keybridge LLC Economy HEADWINDS [-2.54] +0.83 GDP CHANGE [+2.93] +2.93 Consumer Spending Other Investment -2.54 +1.18 Government Spending E&S Investment Tailwinds & Headwinds Contributions to GDP growth by sector Net Exports +0.53 Source: 2023 Annual Equipment Leasing & Finance U.S. Economic Outlook 5 Top Economic Tailwinds ECONOMIC TAILWINDS The economy added 261k jobs in November and job openings remain well above pre-pandemic levels. However, recent signs that wage growth may be accelerating could be a concern for the inflation outlook. Ongoing Fed rate hikes will likely take steam out of the labor market. Strong Labor Market The pandemic fundamentally altered global supply chains, forcing many businesses to re-consider how far their supply chains stretch. Indeed, a 2022 Deloitte survey reported that 2/3 of surveyed manufacturers intend to shift capacity to the U.S. or are considering it, and nearly 1/4 of their Asia-originating freight is expected to shift to the Americas by 2025. Post-COVID Supply Chain Shifts Congress managed to pass three major bills over the past year: the Infrastructure Investment and Jobs Act (IIJA), the CHIPS and Science Act (CHIPS), and the Inflation Reduction Act (IRA). Totaling at least $600 billion in new spending, these bills are expected to act as a catalyst in spurring growth within the manufacturing sector and building greater supply resiliency on domestic soil. Pro-Industrial Legislative Boost 6 Top Economic Headwinds ECONOMIC HEADWINDS Source: 2023 Annual Equipment Leasing & Finance U.S. Economic Outlook 7 Special Topic SPECIAL TOPIC: Recession Watch Source: 2023 Annual Equipment Leasing & Finance U.S. Economic Outlook Keybridge Recession Monitor Red = recession, green = no recession, yellow = in between Recession Gauge Number of indicators flashing red Projections for Key