Investment in construction equipment grew at an annualized rate of 14 percent in the second quarter, according to the Equipment Leasing and Finance Foundation. Investment is up 5.3 percent year-over-year, and is expected to be between 0 and 7 percent over the next four quarters.
The report is a Q4 update of the group’s 2019 Equipment Leasing & Finance U.S. Economic Outlook.
“While we continue to expect both the overall economy and equipment and software investment to moderate this year, they should remain positive,” said Jeffry D. Elliott, Foundation Chairman and Senior Managing Director of Huntington Equipment Finance. “Measures of consumer optimism have declined in recent months, though remain high by historical standards, reflecting a strong labor market and solid wage growth.”
Shipments of equipment grew 8 percent in August, according to the group. It forecasts “moderate growth” in construction equipment investment over the next three to six months.
Truck investment grew at an annualized rate of 0.6 percent for the quarter and is up 7.2 percent year-over-year. Manufacturers’ inventories of light trucks and utility vehicles increased 2.5 percent, the group reports, and suggests positive growth in investment through the end of the year. It predicts growth of 0 to 6 percent over the next four quarters.
Investment in materials handling equipment dropped at an annualized rate of 11 percent in the second quarter and is down 1.4 percent year-over-year. The report suggests continued weakness in investment growth through the end of the year.
On the mining and oilfield machinery side, investment grew at an annualized rate of 32 percent in the second quarter, but is down 7 percent year-over-year. The report calls for continued weakness, however, expecting it to last over the next three to six months.