The Association of Equipment Manufacturers (AEM) recently published an article on the economic outlook for 2020. It stated that while the economy began 2019 rather strong and that the U.S. is in the middle of 100+ months of economic expansion, many thought leaders are forecasting that our hot economy will cool down a bit. Why pump the brakes in the midst of high business and consumer confidence and low unemployment? Rising interest rates, looming tariffs and an inability to hire enough workers, especially skilled labor.
The Global Financial & Leasing Services (GFLS) team keeps a close eye on economic reports, especially those concerning the industries in which we finance equipment. However, we can gauge the economy’s highs and lows simply by the number of equipment financing applications we receive. Over the past few years, applications have been flooding in from customers who are confident enough in the economy that they’re comfortable spending money.
Construction Leads the Way
The construction industry – residential and commercial – historically leads the way in a good economy. Of course, building requires construction equipment, so it’s no surprise that the demand for construction equipment financing is high.
The past few years were good for leasing pre-owned construction equipment. A good economy mean companies can replace older equipment with new, which increases used inventory. There are a number of construction firms leasing their quality, used construction equipment like backhoes, dump trucks, bulldozers, and other heavy equipment in order to offset the cost of purchasing new equipment.
Is Now the Best Time to Finance Construction Equipment?
Despite interest rates, tariff concerns and labor crunches, it is still a great time to finance construction equipment for a few reasons, including:
- Used inventory is excellent
- Current low interest rates (but the Federal Reserve recently has raised rates and more increases could be on the way)
- The quality manufacturing of today’s construction equipment minimizes the risk of the payments outlasting the equipment
AEM reports that the construction industry is expected to experience steady and solid growth, at least in the short term, though no one can predict the impact of any unforeseen circumstances or events. Financing construction equipment makes sense for many construction firms right now.
GFLS helps small and medium-sized businesses finance construction equipment leases, even those with less than perfect credit and who have been turned down by other equipment financing providers. Get started today with an application or contact our team for more information.