2020 Economic Outlook Forecasts Positive Equipment and Software Investment Growth in Q4; Overall GDP Growth Less Certain As Recovery Loses Steam - GlobeNewswire | Canada News Media
2020 Economic Outlook Forecasts Positive Equipment and Software Investment Growth in Q4; Overall GDP Growth Less Certain As Recovery Loses Steam – GlobeNewswire
WASHINGTON, Oct. 07, 2020 (GLOBE NEWSWIRE) — After severe declines in equipment and software investment in Q1 and Q2 due to the effects of COVID-19 and the impact of social distancing measures, investment in equipment and software bounced back in Q3 as the U.S. economy began to reopen. While there is a great deal of uncertainty given the pandemic, annualized growth appears likely to remain positive in Q4, bringing the annual equipment and software investment growth forecast to the -4.9 to -6.4 percent range. The forecast for the broader U.S. economy in Q4 is less certain, though annual U.S. GDP growth for 2020 is forecast between -3.8 and -4.8 percent, according to the Q4 update to the 2020 Equipment Leasing & Finance U.S. Economic Outlook released today by the Equipment Leasing & Finance Foundation.
Scott Thacker, Foundation Chair and Chief Executive Officer of Ivory Consulting Corporation, said, “This update is arguably one of the most important Outlooks the Foundation has published. There has been much uncertainty about the actual economic performance in Q3 and also about how quickly the economy will rebound in Q4 and beyond. This Outlook will be highly useful in explaining Q3 results and in giving a hint about how the year will finish. I am encouraged to see equipment and software investment in Q4 being forecast as positive, with nine out of 12 verticals that the Foundation monitors showing improvement.”
Highlights from the Q4 update include:
Equipment and software investment is forecast to grow between 0 and 10 percent (annualized) in Q4.
The contraction in the U.S. economy in Q2 was unprecedented, with high-contact service industries bearing the brunt of the damage. Although Q3 growth will set records, the unpredictable nature of the public health crisis is clouding Q4 GDP projections. Labor market health and the availability of federal stimulus will be critical factors to watch, as will the pandemic’s trajectory. Growth will suffer if another wave hits.
The U.S. manufacturing sector has bounced back more quickly than expected. Though a shade over half of the 1.4 million lost manufacturing jobs have returned and job growth was relatively modest in September, other industry indicators such as shipments and new orders suggest that the manufacturing sector will strengthen in late 2020 and early 2021.
On Main Street, a fork has emerged in the road to recovery. A majority of small firms are managing to get by for now. Some—perhaps 10 to 20 percent—have been minimally impacted by the recession and are thriving. At the same time, a sizable and growing minority of firms are at heightened risk of closing their doors for the foreseeable future.
The Federal Reserve has continued its massive quantitative easing program in 2020, and financial markets have responded favorably. Meanwhile, the Federal Open Market Committee has unveiled a new policy framework that will allow inflation to run above the usual 2 percent target for some time.
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. Momentum readings are below the five-year average in all 12 verticals, and 9 of 12 verticals are accelerating. Over the next three to six months:
Agriculture machinery investment growth may have hit a turning point and should begin to improve.
Construction machinery investment growth is likely to remain weak, but recent movement is encouraging.
Materials handling equipment investment growth is likely to continue contracting.
All other industrial equipment investment growth is likely to rebound.
Medical equipment investment growth should continue to improve.
Mining and oilfield machinery investment growth may improve, though the global recession is likely to remain a significant headwind for energy demand.
Aircraft investment growth is likely to remain negative.
Ships and boats investment growth is likely to remain in contractionary territory, but recent movement is encouraging.
Railroad equipment investment growth may improve modestly.
Trucks investment growth may have bottomed out and appears likely to improve.
Computers investment growth should remain solidly positive.
Software investment growth should continue to strengthen.
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 final update to the 2020 Economic Outlook before the publication of the 2021 Economic Outlook in December.
ABOUT THE FOUNDATION The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and programs that contribute to industry innovation, individual careers, and the overall betterment of the equipment leasing and finance industry. The Foundation is funded through individual and corporate donations. Learn more at www.leasefoundation.org.
Media Contact: Anneliese DeDiemar 202-238-3425 adediemar@leasefoundation.org
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
