Technology investments could outpace those in heavy equipment in 2H 2020

Technology investments could outpace those in heavy equipment in 2H 2020
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A survey by the Washington-based Equipment Leasing & Finance Foundation has found that after severe declines in equipment investments in the first half of 2020, investment in equipment and software “is projected to improve relative to the first half of the year as businesses reopen.”

Citing “the effects of COVID-19 and the impact of social distancing measures on the United States economy,” the foundation says in a reopening scenario, equipment and software investment growth is likely compared to the contractions seen in the first half of the year.

The current chair of the foundation says software and technology investments may be particularly robust. “Computer and manufacturing investment may be the rare bright spots in the latter half of the year. as manufacturers and businesses create ways to safely open,” says Scott Thacker, who also is the CEO of Walnut Creek, California-based Ivory Consulting Corp.

Thacker says the negative impacts of the epidemic in the first half of the year are hard to dispute. “This update to the U.S. Economic Outlook illustrates the wide-ranging impacts that COVID-19 has had on equipment and software investment as well as on broader economic factors, including credit, the small business outlook, consumer finances, and business financial stress. The pandemic stalled business investment in the first half of 2020 and the near-term outlook for most equipment verticals is bleak.”

The Equipment Leasing & Finance Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor, which is released in conjunction with the Economic Outlook, tracks 12 equipment and software investment categories. A Momentum Monitor Sector Matrix has been designed to provide additional insight, with Momentum readings drawing on five-year averages.

Over the next three to six months, the foundation’s measurements foresee the following:

• computer investment growth appears likely to improve modestly;
• software investment growth is likely to slow, but should remain positive;
• materials handling equipment investment growth is likely to decline further; and
• construction machinery investment growth is expected to contract.

Overall, Equipment and software investment contracted 10.5 percent year-on-year in the first quarter of 2020, the sharpest decline since the late 2008 and 2009 recession, according to the foundation. “The U.S. economy contracted 5 percent annualized in the first quarter of 2020 and is expected to shrink by from 25 to 35 percent annualized in the second quarter,” adds the group.

“Although investment growth is likely to remain weak by historical standards in most sectors over the next three to six months, some [categories], including computers, could see stronger demand,” says the foundation.

Looking ahead, the foundation also notes, “Stimulus efforts have helped forestall a wave of Main Street bankruptcies, but new virus flare-ups are disrupting some reopening efforts, further stressing many small businesses.”

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Source: Recycling Today
Technology investments could outpace those in heavy equipment in 2H 2020
<![CDATA[A survey by the Washington-based Equipment Leasing & Finance Foundation has found that after severe declines in equipment investments in the first half of 2020, investment in equipment and software “is projected to improve relative to the first half of the year as businesses reopen.”Citing “the effects of COVID-19 and the impact of social distancing measures on the United States economy,” the foundation says in a reopening scenario, equipment and software investment growth is likely compared to the contractions seen in the first half of the year.The current chair of the foundation says software and technology investments may be particularly robust. “Computer and manufacturing investment may be the rare bright spots in the latter half of the year. as manufacturers and businesses create ways to safely open,” says Scott Thacker, who also is the CEO of Walnut Creek, California-based Ivory Consulting Corp.Thacker says the negative impacts of the epidemic in the first half of the year are hard to dispute. “This update to the U.S. Economic Outlook illustrates the wide-ranging impacts that COVID-19 has had on equipment and software investment as well as on broader economic factors, including credit, the small business outlook, consumer finances, and business financial stress. The…