Prospects Are Brightest For Construction And Transportation in 2013

As we come to the end of 2012, forecasters at ELFA are looking at the prospects for the equipment leasing and financing industry for 2013, and the winners as they stand right now are the construction and transportation industries.

Construction tops the list, with a projected 15% growth over the course of the 2013 business year. This is after a number of lean years, primarily driven by the depressed housing market, and as that market continues to improve, industry forecasters are predicting a major move across the board when it comes to new construction equipment leasing and investment. While the first half of the year may be the slowest, the 15% projected growth is expected to be easily achieved by the second half of 2013.

Transportation comes in second with a projected annual growth of 10% in 2013, with much of this growth stemming from what ELFA refers to as “real personal consumption expenditures for motor vehicles and parts that continue to demonstrate strength.”

construction equipment leasing

The news isn’t as cheery for other industries, due in no large part to the continuing uncertainty over fiscal cliff talks. Many US companies have basically hit the pause button until these issues are reslved one way or another.  Among the weaker candidates for growth are:

Agriculture – Following a drop of more than 40% last quarter, the projections aren’t much better for the immediate future, with droughts depressing crop production and with it, any demand for new equipment.

Computers & Software – Investment is expected to remain stagnant for the next 3 to 6 months, following  an anemic growth of 0.5% last quarter.

Medical – Investment is projected to range between -2 and 2% over the coming months, as the signs in the industry have remained soft for quite some time and are expected to remain that way. With the effects of ObamaCare still unknown and quite controversial in many quarters, medical facilities are opting to hold off and see how this issue finally plays out. Many forecasters do believe that ultimately the law will be a net positive for the industry.

Industrial – third quarter growth slowed from 13% to 4.5%, foreshadowed by weaker industrial production, reduced capacity utilization, and slight gains in manufacturing orders. Growth is projected to be average or slightly weaker over the next six months.

Keep in mind that many of these factors are the result of continuing indecision and concern over the fiscal cliff crisis in Washington DC, and how that issue plays out will no doubt change many of the projections currently put forth by the experts.

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