Over much of last year, the US showed the rest of the world the way in terms of economic growth, and the momentum in the economy is being reflected in the performance of the equipment finance and leasing industry.
The equipment finance market in the US is forecast to grow from $903 billion in 2014 to $922 billion in 2015 – that is to say, of the estimated all-time high of $1.484 trillion that is projected to be invested in plant, equipment and software, 62% is expected to be financed through loans, leases and lines of credit.
The main representative organization for the equipment finance and leasing industry in the US is the Equipment Leasing and Finance Association (ELFA), which produces the Monthly Leasing and Finance Index (MLFI-25), a summary of economic activity from 25 equipment finance companies representing a cross-section of the sector.
The December MLFI-25 showed that overall new business volume (NBV) for these financial institutions totalled $12.9 billion. The US market typically spikes at the year-end, but this figure represents an exceptional 20% increase on NBV in December 2013, and a rise of 90% from the November volume of $6.8 billion.
However, the year-on-year changes for monthly new business varied considerably, as can be seen in the chart below – where, for example, the +20% difference in December 2014 over December 2013 was preceded by a decline of -8% for the November totals.
Nonetheless, the overall situation was positive, with cumulative new business for the 25 MLFI companies growing 8% over the year, from $88.5 billion in 2013 to $95.2 billion in 2014.
Read the entire White Clarke Group report here.