The equipment finance market is projected to reach $827 billion in 2013, according to the 2013 State of the Equipment Finance Industry Report released today at the 52nd Annual Convention of the Equipment Leasing and Finance Association. The study, published by the Equipment Leasing & Finance Foundation and authored by Keybridge Research, provides a unique look at trends in the equipment finance industry over the past year, identifies key drivers for future growth, and projects what the industry might look like in five to ten years.

“In an environment of solid performance, but increased uncertainty and competition, the equipment leasing and finance industry continues to find ways to adapt to new and uncertain circumstances and to provide customers with affordable financing and needed business services related to the operation, maintenance and disposal of capital equipment,” said Cameron Krueger, Chairman of the Equipment Leasing & Finance Foundation and Director and National Asset Finance & Leasing Practice Leader at Deloitte. “The 2013 State of the Equipment Finance Industry report expands on the lessons learned over the past several years, and helps identify emerging trends that will drive the industry forward.”

Key findings from the 2013 State of the Equipment Finance Industry report include:

• Strong growth and record-setting performance in 2012: Amidst an uncertain macroeconomic and policy environment, 2012 was a solid year for new business volume, portfolio performance and operating results. Overall, in 2012 the equipment finance industry demonstrated its resiliency as a source of capital for the business sector and as a growth engine for the U.S. economy.

• Growth amidst uncertainty: Equipment and software investment, leasing and financing have enjoyed solid growth over the past several years for multiple reasons, including a recovering U.S. economy, the emergence of domestic unconventional oil and gas production, the nascent housing recovery and continued growth in demand for information technology.  However, economic and political uncertainties have hampered growth in some sectors, and a challenging regulatory environment has constrained the financial services sector.

• Investment in equipment and software is at an all-time high, both in terms of dollar value and as a share of GDP.  Business investment in equipment and software hit an annualized rate of $1.22 trillion in the second quarter of 2013, and has been responsible for 7.8% of GDP in each of the past three quarters.

• 2013 could be a transitional year for the equipment leasing and financing industry.  Macroeconomic and industry data suggest that the equipment investment cycle may be entering a new phase. The replacement cycle has been ongoing across many equipment verticals and, in some markets, particularly transportation equipment, demand is beginning to subside as the replacement cycle nears completion.

• The equipment finance market is projected to reach $827 billion in 2013. As of 2012, the economy-wide propensity to finance equipment and software was estimated to be approximately 56% (i.e., $0.56 out of every dollar of equipment and software investment is leased or financed). Data from the Bureau of Economic Analysis for 2012 show nominal equipment and software investment of $1,374 billion for private and public sectors, an increase of 7.3%. Accordingly, the equipment finance industry is estimated to have also increased 7.3%, to $776 billion in 2012. Based on data for the first half of year, the equipment finance industry is estimated to be $827 billion in 2013.

The 2013 State of the Equipment Finance Industry Report is available for purchase at www.LeaseFoundation.org. Members of the press may request a complimentary copy by contacting Amy Vogt at avogt@elfaonline.org.

The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that provides vision for the equipment leasing and finance industry through future-focused information and research. Primarily funded through donations, the Foundation is the only organization dedicated to future-oriented, in-depth, independent research for the leasing industry.