Top 10 equipment acquisition trends for 2012

Source: Equipment Leasing & Finance Foundation

Feb 14, 2012

The Equipment Leasing and Finance Association (ELFA www.elfaonline.org) which represents the $628 billion equipment finance sector, revealed its Top 10 Equipment Acquisition Trends for 2012. Given that every year U.S. businesses, nonprofits and government agencies spend in excess of $1.2 trillion in capital goods or fixed business investment (including software), financing more than half of those assets, these trends impact a significant portion of the U.S. economy. Growth, uncertainty and numerous end-user benefits underlie many of the trends that businesses acquiring equipment this year can expect.

ELFA issued the following Top 10 Equipment Acquisition Trends for 2012 to help businesses with their strategic equipment acquisition plans:

1. New equipment acquisition will gradually, but steadily improve. The equipment finance industry is forecasting nine percent growth in investment in equipment and software for 2012, indicating that equipment acquisition by businesses in many industry sectors will increase this year.

2. Replacement needs will continue to drive new equipment acquisitions. Aging of equipment and replacement needs will be the main drivers of new equipment acquisition, as businesses await stronger signs of economic improvement before expanding their equipment investment.

3. Uncertainty over proposed changes to lease accounting will have businesses playing a waiting game. The resolution of proposed changes to lease accounting standards by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) later this year will have businesses waiting to find out how their balance sheets, earnings and other financials will be affected. Meanwhile, industry advocacy will continue to mitigate the negative impacts of lease accounting changes on U.S. businesses and the economy. The good news is that the primary reasons to lease equipment will remain intact, from maintaining cash flow, to preserving capital, to obtaining flexible financial solutions, to avoiding obsolescence.

4. Used equipment prices will rebound in many, but not all, market segments. The collateral value of many categories of equipment that ‘bottomed out’ over the last few years will rebound in 2012. Car and truck values will be particularly strong, and construction equipment also will hold its value. Certain segments, such as corporate aircraft, will remain at relatively lower values.

View the rest of the equipment acquisition trends for 2012

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