Investment in equipment and software will reach an all-time high in 2015, according to the Equipment Leasing and Finance Association. ELFA released its Top 10 Equipment Acquisition Trends for 2015 today, noting that U.S. businesses, nonprofits and government agencies are on tap to spend nearly $1.5 trillion this year for capital goods or fixed business investment.
Is the glass industry part of this $1.5 trillion investment boom? Absolutely.
Capital investment is in full swing among companies across the glass industry. According to Glass Magazine’s Top Metal Companies survey, 81 percent of respondents report plans to invest in new capital equipment. The same is true among glass fabricators, with 78 percent of companies reporting plans to buy fabrication machinery in 2015, according to Glass Magazine’s Top Glass Fabricators report, set to run in the January/February issue.
|Infographic: Top 10 Equipment Acquisition Trends for 2015|
So, what should glass companies keep in mind as they invest throughout the year? First, companies should eye expansion in addition to replacement. According to the ELFA report, expansion will overtake replacement in 2015, as firms look beyond simply replacing aging assets, and expand to meet growing demand. “The pent-up replacement demand that has driven equipment investment in previous years may be supplemented by long-awaited expansion investment as capacity utilization rates in some industries reach or surpass levels historically known to spur business investment. Industries poised for investment growth include oil and gas extraction and transportation equipment manufacturing,” according to ELFA.
Additionally, ELFA anticipates credit will become increasingly available throughout the year, as the economy continues to improve. “As the economy steadily improves and business confidence continues to increase, credit standards should modestly loosen,” according to ELFA. This will be a long-anticipated change for companies in and out of the glass industry that have faced tight credit since the Recession.
Glass companies should continue to watch short-term interest rates. While rates have remained low, encouraging investment, ELFA anticipates the Federal Reserve will raise rates in the year. Business should invest while rates are low to “lock in equipment financing at lower rates,” according to the report.
2015 is poised to offer prime opportunities for investment and expansion. And, as ITR Economist Jeff Dietrich said at the Glazing Executives Forum in September, "It's time to get off the fence and invest."
—Katy Devlin, editor, Glass Magazine
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