The 2019 Equipment Leasing & Finance Industry Horizon Report emphasizes forward-looking economic and industry insights related to the U.S. economy—including near- and medium-term economic risks—based on market insights provided by industry leaders. The Foundation commissioned Keybridge Research to conduct this comprehensive research on the size and expected growth of the U.S. equipment finance market.

Key findings from the 2019 Equipment Leasing & Finance Horizon Report include:

• Total equipment and software investment continued to grow in 2018, with nominal investment expanding by 5.9% to $1.8 trillion. Based on the results of the Foundation’s end-user survey and analysis by Keybridge, approximately 50% of this investment (and 55% of private sector investment) was financed, resulting in an industry sizing estimate of about $900 billion.
• The end-user survey also revealed that 79% of respondents who acquired equipment or software in 2018 used at least one form of financing to do so (i.e., lease, secured loan, or line of credit). This represents a substantial increase compared to the Foundation’s 2017 estimate (58%) and a return to levels observed in 2015 (78%) and 2011 (72%).
• The majority of respondents expect the volume of their equipment and software acquisitions to remain the same over the next 12 months (56%), while the share of end-users who expect volume to increase (22%) roughly matches the share who expect it to decrease (21%). Of those who expect acquisitions to increase, the majority (59%) expect to use a financing method to cover at least a portion of the cost.
• As the longest expansion in U.S. history continues, several economic indicators that have historically provided early warning of a downturn suggest that there may be a slowdown ahead. Overall, a recession will pose challenges for most players in the equipment finance industry. However, those challenges might be mitigated by the adjustments equipment finance professionals can make to their portfolios and strategy in the months leading up to a recession and at recession onset.
• Based on the new Foundation-Keybridge Equipment Finance Industry Recession Monitor’s current reading, we believe recession-like conditions for the industry—that is, a full recession or a near-recession that drags down the business and industrial segments of the economy, including the equipment finance industry—are unlikely to occur in the next six months. However, the preponderance of economic data suggests that a recession in the next 6–12 months would not be particularly surprising (though the probability appears to be less than 50%)—and a recession in the next 12–24 months is more likely than not.