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74 • ROCK products • August 2018 A fter solid growth in 2017, investment in equipment and software should remain strong in 2018 and is projected to expand 7.0 percent (down from 8.5 percent in the Second Quarter Economic Outlook published in April) according to the third quarter update to the 2018 Equipment Leasing & Finance U.S. Economic Outlook released by the Equipment Leasing & Finance Foundation. Business investment continues to expand at a robust pace, contributing to a likely strong year for the U.S. economy. Over- all, the economy is expected to grow 2.8 percent in 2018, up from 2.7 percent in its previous outlook and significantly better than last year's 2.3 percent growth rate. The quarterly report by the Foundation, which is focused on the $1 trillion equipment leasing and finance sector, high- lights key trends in equipment investment and places them in the context of the broader U.S. economic climate. Jeffry D. Elliott, Foundation chairman and senior managing director of Huntington Equipment Finance, said, "Momentum continues to be positive for the equipment finance industry with a forecast including a stable growing capital expenditure environment." Highlights from the study include: •  Capital spending has been solid thus far in 2018, and strengthening economic momentum coupled with elevated business confidence levels should lead to continued invest- ment during the third and fourth quarters. Investment in equipment and software is expected to grow by 7.0 percent, and financial stress remains low. Credit supply conditions are mixed as banks are easing standards for C&I and com- mercial real estate loans while tightening standards for household lending. • Solid economic fundamentals suggest the economy could reach the 3 percent annual growth target in 2018, but a stagnant housing market, potential softening in global growth (particularly in emerging markets), and continued upheaval in U.S. trade policy are areas of concern. • Overall, the U.S. economy remains on firm footing in 2018 as most major GDP components are contributing pos- itively to growth, with the notable exception of housing. The labor market should maintain its strength and drive improvements in consumer spending (which fell far short of expectations in the first quarter), while business invest- ment should continue to impress. The Foundation-Keybridge U.S. Equipment & Software Invest- ment 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. Overall, investment in most equipment verticals should remain solid in 2018. Over the next three to six months: •  Construction machinery investment growth should hold steady, though investment growth may peak later this year. • Material handling equipment investment should continue to grow at a moderate pace. •  Mining and oilfield machinery investment growth may improve. • Aircraft investment growth is unlikely to worsen and may improve. •  Ships and boats investment growth is expected to increase. •  Railroad equipment investment growth should remain steady. • Trucks investment growth may soften. • Computers investment growth should remain solid. • Software investment growth should remain stable. •  Agriculture machinery investment growth will likely soften. The Foundation produces the Equipment Leasing & Finance U.S. Economic Outlook report in partnership with economic and public policy consulting firm Keybridge Research LLC. The annual economic forecast provides a three-to-six-month outlook for industry investment with data, including a sum- mary of investment trends in key equipment markets, credit market conditions, the U.S. macroeconomic outlook, and key economic indicators. The third-quarter report is the second update to the 2018 Annual Outlook and will be followed by one final quarterly update prior to the publication of the 2019 Annual Outlook in December. Download the full report at try-resources/u-s-economic-outlook. All Foundation studies are available for free download from the Foundation's online library at Aggregates Equipment Earlier this year, the Rock Products Benchmark Study 2018 revealed that about 54 percent of survey respondents reported an increase in their company's capital expenditures for 2018. This year approximately 28 percent of the survey group plan to spend up to $500,000. About 24 percent plan to spend $1 million to $5 million this year. Another 23 percent of the survey group planned to spend $5 million to $10 million. Aggregates Industry Almanac Equipment Update Equipment Update Business Investment Continues to Expand at a Robust Pace, Contributing to a Likely Strong Year for the U.S. Economy.

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