Equipment investment slumps in US

News Story
- 16 Apr 2020 ( #970 ) - Washington, DC, United States
2 min read
Equipment demand is falling
Equipment demand is falling
Investment in equipment and software is projected to contract severely in 2020 by as much as 13.5% due to the substantial uncertainty stemming from both COVID-19 and the impact of social distancing measures on the US economy.

Similarly, the US economy is expected to have its worst year in decades, with annual shrinking by between 5 and 9.4%, according to the Q2 update to the 2020 Equipment Leasing & Finance U.S. Economic Outlook released by the Equipment Leasing & Finance Foundation (ELFF).

While the economy will continue to suffer until the public health crisis is resolved, conditions are expected to improve in the third and fourth quarters, which should produce strong annualised growth rates after a large contraction during the first half of the year. Nonetheless, the economy will be smaller at the end of 2020 than it was at the start.

Scott Thacker, foundation chair and chief executive officer of Ivory Consulting Corporation, says the survey results clearly show the COVID-19 impact on the economy. "The report portrays in detail how 2020 is likely to be one of the most challenging years in history for the US economy and for our industry. Going into 2020, equipment and software investment was already at its weakest growth level since 2016, and now is expected to plunge to nearly unprecedented low levels of growth.

"There are a few equipment verticals, however, such as medical devices and computers, that are expected to be more resilient," he adds.

According to the report, capital investment contracted for three consecutive quarters in 2019 and will suffer due to the pandemic. The oil sector is likely to be particularly exposed due to the combination of cratering global demand and a price war.

The manufacturing sector also faces a sharp downturn in 2020, although certain industries critical to public health may see a boost in demand, the survey found.

Most equipment verticals will face a difficult investment environment in 2020, although select industries may experience a boost. The survey indicates that over the next three to six months, materials handling equipment investment is likely to remain negative.

ELFF states that while some Main Street businesses will continue to operate as the country copes with the pandemic, many won't - and most will suffer. The success of federal efforts to help small businesses stay afloat and avoid widespread layoffs and business failures is critical.

"The US economy is in recession and will undergo a historically deep contraction in the second quarter. However, a timely and well-coordinated policy response of sufficient scale could limit the recession's long-term effects," analysts add.
Jungheinrich records ‘resilient’ results
Jungheinrich records ‘resilient’ results 16 Aug 2024 - Hamburg, Germany - 1 min read
KION narrows revenue forecast
KION narrows revenue forecast 8 Aug 2024 - Frankfurt, Germany - 1 min read
Kalmar makes stock market debut
Kalmar makes stock market debut 4 Jul 2024 - Helsinki, Finland, Finland - 1 min read
Previously about:
Equipment finance confidence eases  News Story - 24 Mar 2022 - Washington, DC, United States - 1 min read
US equipment investment on the rise News Story - 15 Apr 2021 - Washington, DC, United States - 2 min read
Equipment finance sentiment rises News Story - 24 Sep 2020 - Washington, DC, United States - 1 min read
Do you have materials handling news? Submit your news here
Inside The News
While innovation and new technology are evolving at what seems to be an ever-increasing pace, the need to capture the data (telemetry) from this tech, and the ability to utilise it (telematics) for efficiency and cost savings, is one area attracting more and more attention ... Continue reading

PREMIUM business

MAXAM Tire, Inc.
Simplify your productivity with MAXAM's range of performance material handling tires, designed with the latest EcoPoint3 technology.

We’re excited to launch a major upgrade to the Forkliftaction forums, packed with new features and improvements. Here’s what’s new:

  • You can now add up to two photos to your posts
  • New search & navigation - find what you need easier
  • Smart brand/model tagging across all forums
  • Top contributors recognised for their efforts!

 Head over to the forums to check it out!

Words of support …

After advertising with Forkliftaction.com, we got many enquiries regarding interest to be our distributor. Mostly from Europe and USA but including a few in ASEAN. We feel that the advertisement was useful and good for market expansion.

Lawrence Xu, Assistant Sales Manager

Are you recruiting? Find your ideal candidate among a diverse range of materials handling professionals:

Forkliftaction's JOB MARKET

Even the heaviest lifts must be easy to handle. That’s why N.C. Nielsen raises the bar in lifting capacity, maneuverability, operator comfort, flexibility and technical capabilities.
Heavy duty reach stackers – lifting capacity from 85 to 180 tons.
VIEW ALL OUR CUSTOM-BUILT HEAVY DUTY REACH STACKERS

Contact us now: +45 99 83 83 83 - www.nc-nielsen.com

PREMIUM business

Hawker Powersource, Inc.
HAWKER® offers a range of hybrid motive power solutions customized to adapt as your operation's needs change.

Are you recruiting? Find your ideal candidate among a diverse range of materials handling professionals:

Forkliftaction's JOB MARKET

PREMIUM business

RAEDER-VOGEL
Innovative high-quality wheels and castors for the forklift industry.

Are you recruiting? Find your ideal candidate among a diverse range of materials handling professionals:

Forkliftaction's JOB MARKET

Even the heaviest lifts must be easy to handle. That’s why N.C. Nielsen raises the bar in lifting capacity, maneuverability, operator comfort, flexibility and technical capabilities.
Heavy duty reach stackers – lifting capacity from 85 to 180 tons.
VIEW ALL OUR CUSTOM-BUILT HEAVY DUTY REACH STACKERS

Contact us now: +45 99 83 83 83 - www.nc-nielsen.com