The US equipment finance market is expected to outstrip previous growth predictions to become an $827bn (€602bn) industry in 2013.

Based on data from the first half of the year, a report published by the Equipment Leasing & Finance Foundation (ELFF) has estimated the US leasing market will reach the size by the end of the year and has revised the figure for 2012 up to $776bn. The report estimated the figures for 2014 and 2015 market size would be $860bn and $891bn respectively.

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A similar report from last year estimated the 2012 figure at $725bn and predicted the 2013 total would be $740bn, growing to $778bn in 2014.

The market size figure is based on US businesses’ "propensity to finance" their equipment and software investments which is derived from a survey of business spending habits. The US-wide propensity to finance figure used in this latest study was 56%. The growth in estimated market size was attributed to higher-than-expect investment level in 2012 and the first half of 2013.

‘Transitional year’

The report described 2013 as a "transitional year" for the equipment finance industry and said macroeconomic and industry data suggested the replacement investment cycle was coming to an end and demand was beginning to subside.

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It said 2012 had been record year for the equipment finance industry amid economic and political uncertainty and said the same uncertainty had continued in 2013 and hampered growth in some sectors but it would be another record year for the finance industry.

The report found total investment in equipment and software at an all-time in terms of dollar value and share of GDP, which it calculated was 7.8% in the previous three quarters.

Cameron Krueger, chairman of ELFF and director of Deloitte’s Asset Finance & Leasing Practice, said: "In an environment of solid performance, but increased uncertainty and competition, the equipment leasing and finance industry continues to find ways to adapt to new and uncertain circumstances and to provide customers with affordable financing and needed business services related to the operation, maintenance and disposal of capital equipment."

The research, conducted by Keybridge Research, was published in 2013 State of the Equipment Finance Industry Report and presented at the Annual Convention of the Equipment Leasing & Finance Association.