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Construction Equipment Investment to Grow in 2020: Report

December 12, 2019
Chart shows Construction Machinery Momentum Index.
Equipment Leasing & Finance Foundation's Construction Machinery Momentum Index.

Investment growth in construction equipment should “increase moderately” in 2020, according to a new report from the Equipment Leasing & Finance Foundation. Citing an increase of 4 percent in the third quarter over the same period in 2018, the Foundation says its Construction Machinery Momentum Index points to “modest growth in construction machinery investment growth over the next two quarters.”

The forecast is part of the Foundation’s 2020 Equipment Leasing & Finance U.S. Economic Outlook. The report calls for overall investment in equipment and software to grow 1.1 percent over 2019.

After decelerating over the course of 2019, the U.S. economy is poised to soften further in 2020, the Foundation said in announcing the release of the report. The Foundation suggests “several headwinds” will continue to drag down business confidence and investment in early 2020.

“After robust growth in 2018, equipment and software investment slowed markedly throughout 2019 and contracted in the third quarter as the effects of unresolved trade tensions and a slowing global economy took hold,” said Foundation chair Scott Thacker in a prepared statement. “However, a strong labor market and still-confident U.S. consumer base should keep the broader economy above water, even as investment in several key equipment verticals slows or remains weak.”

The Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor, which is included in the report, 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.

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 a three-to-six month outlook for industry investment with data, including a summary of investment trends in key equipment markets, credit market conditions, the U.S. macroeconomic outlook, and key economic indicators. The report will be updated quarterly throughout 2020.

Source: Equipment Leasing & Finance Foundation

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