EQUIPMENT OUTLOOK 2017 Construction Equipment Repeats as the Winner, Plastic Breaks into the Top 5 W 1 hat are the hottest equipment sectors in 2017? Th e answer is construction, medical, machine tools, high-tech/computer, plastics and trucks/ trailers, according to a new survey of ELFA member asset managers and consultants. Th e 2017 “What’s Hot/What’s Not” Equipment Leasing Trends Report reveals industry perceptions of 15 equipment markets based on a survey of ELFA members. Th e study’s author is Carl Chrappa of Th e Alta Group, LLC. Th e following are the top 5 equipment types from the survey: 1 exploration sector. In the primary market, sales for metal cutting equipment fell -4.3% in 2016, though total consumption remains high. Sales for this sector are also forecast to remain high in 2017. However, the second-ary market for machine tools has weakened a bit and prices are now being discounted in both the primary and secondary markets. 2 4 CONSTRUCTION EQUIPMENT was the big winner for the fourth year in a row. Th e outlook for construction remains good, pinned to the im-proving health of the economy and low interest rates. Sales of used equipment have been declining a bit due to sales in the primary market, weak global trade and the strong dol-lar discouraging exports. Proposed national infrastructure projects could be a plus. HI-TECH/COMPUTERS fi nished in fourth place. Th is in-dustry continues to operate on very low margins but has a very large secondary market. Global computer sales continued to drop in 2016. Declining primary market PC sales refl ect a growing preference for phablets and wearables, but could have positive implications for the secondary market. 3 MEDICAL EQUIPMENT finished in second place. Th is high standing in rank is believed to be linked to a bet-ter understanding of the impact of the Aff ordable Care Act on hospitals and clinics and talk of an ACA overhaul. Th is industry has a preference for leased equipment, which continues unabated. However, potential Deductible Reimbursement Account (DRA) reimbursement cuts and rules aimed at the industry could weaken the new equipment market while potentially making some used equipment more desirable. 2 4 PLASTICS EQUIPMENT tied for fifth place. Currently, this market segment continues to experience a solid turnaround in almost all categories. Sales of new injec-tion molding machines increased again for the seventh year in a row. Used prices for plas-tic injection molding machines have increased by 20% to 50+% over the past fi ve years. Much of this is thanks to the automotive industry, which requires high-ca-pacity IMMs for its products, and auto parts suppliers, which utilize smaller capacity plastic equipment. 5 5 TRUCKS/TRAILERS tied for fi ft h place. New truck sales dropped more than 22% last year and are expected to fall again this year. Competition from rail bears some of the blame. New trailer shipments were brisk, breaking the 2006 record. Sales of used trucks and trailers are good, although resale values have been declining. Th is sector has greatly ben-efi ted from low fuel prices and interest rates. Th ere is continued optimism for this equipment type. View the results for all 15 equipment cate-gories on the ELFA website at www.elfa online.org/data/market-trends. 3 MACHINE TOOLS fi nished in third place due to the strong domes-tic automotive and allied industries, along with the now-improving oil 5 IMAGERY: SHUTTERSTOCK EQUIPMENT LEASING & FINANCE MAGAZINE MARCH/APRIL 2017 37