Top 10 Trends for Equipment Acquisition
by Karen M. Scally
January 10, 2012
Recently, the Equipment Leasing and Finance
Association (ELFA) released its report on the top 10 equipment acquisition
trends for 2012. According to ELFA, the trends show some good news … and some
not-so-good news. (I just can’t bring myself to call it bad news. Who wants any
more bad news?)
But really, the trends are mostly positive, so let’s take a look at
the good news first. According to the report, in many areas, the
equipment acquisition industry is on an upward trend. Here are some of the
positive trends, according to ELFA:
- The industry is forecasting 9 percent growth in investment in equipment and software for this year.
- Construction equipment will hold its value. This is good for used equipment prices, which ELFA says are rebounding in many segments.
- Credit availability will help facilitate acquisitions. For 2011, ELFA says credit approvals for the equipment finance industry remained above 75 percent. ELFA notes that credit approvals may be higher in the equipment finance industry, as opposed to loans from banking institutions.
- The limited bonus depreciation allows businesses to write off 50 percent of the cost on new equipment purchases in 2012.
And for the not-so-good news. While there may be growth in equipment acquisitions, ELFA says it will be slow. Here are some reasons why the growth remains hampered:
- Global uncertainty regarding the economy persists.
- Uncertainty over proposed lease accounting changes is also holding acquisitions back.
- Aging equipment and replacement needs continue to be the primary drivers of acquisition.
- Construction equipment investment’s continued growth hinges on movement in the energy and housing sectors.
You can read the full report on the trends here. I’d like to know what you think about these trends. Do they reflect what you’re experiencing? Please share your comments below.
Related: Click here for some basic tips on equipment acquisition.
Karen M. Scally
scallyk@bnpmedia.com
Karen M. Scally is the editor of Site Prep.
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