Supply chain pressures and material costs have improved across various equipment asset classes through 2023, but what does the future hold? A new study, “Future Supply Chain Impacts on the U.S. Equipment Leasing & Finance Industry,” released by the Equipment Leasing & Finance Foundation (Foundation) presents a comprehensive examination of short and long-term forecasts for major equipment finance industry asset classes, and also identifies key macroeconomic changes that will occur over the next decade and beyond.
The study was commissioned by the Foundation and prepared by Zeihan on Geopolitics and Rinaldi Advisory Services. It utilizes a hybrid geopolitical model to help equipment finance professionals understand the significant future headwinds facing global supply chains. This study identified three major macroeconomic trends that the industry must adapt to:
- China’s demographic collapse
- Global baby boomer retirement
- The end of the globalized trade order
Complementing the perspective on geopolitical conditions and risks are high-level, action-oriented suggestions and considerations for the equipment finance industry. They include a checklist of steps to identify and mitigate risk, and insights on used equipment values, labor shortages and equipment-as-a service.
“Geopolitics hasn’t been much of a consideration for the equipment finance industry until the last couple of years. However, this study makes it clear that it is now an ongoing issue for business planning, especially regarding forward-looking origination and valuation projections by equipment type,” said Tom Ware, Foundation Research Committee Chair. “The researchers provide objective, tangible forecasts of equipment supply chain issues that will arise, and visibility into the timing and likely locations of reshoring/onshoring of domestic manufacturing that are critical to equipment finance companies. Readers will be interested to learn why North America is likely to be a lone shining point in a global economy.”
Download the full report at https://bit.ly/ELFFSupplyChain.