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Crane Hot Line

Q4 Outlook Forecasts 5.9% Growth in Equipment and Software Investment

Nov. 1, 2022 – Despite early indicators of a modest rebound in equipment and software investment growth in Q3, demand may soften in several markets over the remainder of the year due to high interest rates and expectations for further rate hikes, according to the Q4 update to the 2022 Equipment Leasing & Finance U.S. Economic Outlook recently released by the Equipment Leasing & Finance Foundation.

The update forecasts equipment and software investment growth of 5.9% in 2022, as well as U.S. GDP growth of 1.8%.

Focused on the $1.16 trillion equipment leasing and finance industry, the report highlights key trends in equipment investment in the context of the U.S. economic climate.

Nancy Pistorio, foundation chair and president of Madison Capital LLC, said, “While many of the factors highlighted in the Foundation’s Q4 Economic Outlook have worsened in recent months, including the U.S. housing sector, the global economic backdrop, and Fed actions to control inflation, there are bright spots. The industrial core of the economy continued to hum along in the late summer and early fall, and demand for equipment remains strong despite concerns of a looming recession.”

Highlights from the Q4 update to the 2022 Outlook:

  • Equipment and software investment grew just 1.9% (annualized) in Q2, a notable slowdown from strong growth in Q1. The effects of Fed interest rate hikes appear to be filtering through the economy, but most verticals are not showing cause for serious concern. However, demand is expected to soften late this year and in early 2023 as the Fed continues to address inflation.

  • The U.S. economy contracted through the first six months of 2022, amplifying recession concerns. The labor market remains a bright spot, but higher interest rates are increasingly taking a toll on the U.S. housing market and the global economy, which is struggling under the weight of the strongest dollar in decades. Still, a recession is unlikely to occur in 2022.

  • In the manufacturing sector, loosening supply chains have allowed industrial activity to continue expanding despite rising interest rates and high inflation weighing on business confidence. The recent passage of multiple infrastructure-related bills should provide a modest tailwind for the equipment finance industry in 2023.

  • The outlook for Main Street businesses over the remainder of the year has worsened. While small and medium-sized businesses are starting from a position of relative strength, the dual impacts of high inflation and surging interest rates are likely to impact smaller firms first and hardest. With borrowing more expensive and sales expectations weak, small business owners are likely to feel pressure to slow or pause expansion and hiring plans.

  • Despite rapidly increasing interest rates, the Fed’s actions to quell inflation seem to have had little effect. Fed officials have repeatedly emphasized the importance of reining in inflation, even if it means sending the U.S. economy into a recession.

    • The Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor, which is released in conjunction with the Economic Outlook, tracks 12 equipment and software investment verticals. In addition, the Momentum Monitor Sector Matrix provides a customized data visualization of current values of each of the 12 verticals based on recent momentum and historical strength. This month four verticals are expanding/thriving, four are peaking/slowing, and four are weakening/struggling. Over the next three to six months, year over year:

    • Agriculture machinery investment growth is unlikely to improve.

    • Construction machinery investment growth is likely to slow.

    • Materials handling equipment investment growth is likely to remain soft.

    • All other industrial equipment investment growth may continue to decelerate.

    • Medical equipment investment growth will likely hold steady.

    • Mining and oilfield machinery investment growth may have peaked, though growth is expected to remain positive.

    • Aircraft investment growth may begin to rebound.

    • Ships and boats investment growth is unlikely to accelerate.

    • Railroad equipment investment growth will likely remain strong.

    • Trucks investment growth may improve.

    • Computers investment growth will likely continue to sidewind.

    • Software investment growth will likely decelerate further.

The Foundation produces the Equipment Leasing & Finance U.S. Economic Outlook report in partnership with economic and public policy consulting firm Keybridge Research.

The annual economic forecast provides the U.S. macroeconomic outlook, credit market conditions, and key economic indicators.

The Q4 report is the third update to the 2022 Economic Outlook and the final quarterly update before the publication of the 2023 Economic Outlook in December.

Download the full report at

Download the Momentum Monitor at

All Foundation studies are available for free download from the Foundation’s online library at


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