Equipment Leasing Association Releases Report on the Economic Impact of Leasing 3/1/2004
From: Amy J. Holmes of Equipment Leasing Association, 703-516-8367; e-mail: aholmes@elamail.com ARLINGTON, Va., March 1 -- Global Insight and the Equipment Leasing Association (ELA) today releases a study, The Economic Contribution of the Equipment Leasing Industry to the U.S. Economy, of the impact the equipment leasing and finance industry has on the U.S. economy and jobs. The study was conducted by Global Insight, a global economic and financial forecasting company, at the request of ELA in August 2003. ELA President Michael Fleming and Global Insight Senior Consultant Christopher Swann, Ph.D. unveil the results in a press teleconference today at 11 a.m. Eastern time. To register for the call, please visit http://www.infiniteconferencing.com/ELA_Register.html. An audio file and the transcript of the teleconference will be available at http://www.elaonline.com/press/ on Tuesday, March 2. A copy of the full study may be found at http://www.elaonline.com/industryData/ELAEconomicContrib.pdf Key results of the study show that, over the 1997-2002 period, the equipment leasing industry: -- Produced between $100 billion and $300 billion additional real GDP. -- Produced between $227 billion and $229 billion additional real equipment investment. -- Created between three million and five million additional jobs. "The most important contribution of the equipment leasing industry lies in providing access to capital," said Michael Fleming, who has led the association for the last 25 years. "If leasing were unavailable many entities, from non-profit to private organizations, from tax-exempt entities to public companies, would not be able to acquire the equipment they need. This report clearly shows that when leasing is unavailable, the demand for equipment is curtailed." "Recently we had to restructure our financials to expand our entire plant and we were able to move quickly with leasing," said Richard Viti, Executive Vice President and CFO of Tast i Twist Bakers, Inc. dba Delorio's Frozen Dough Co., a $7.6 million commercial frozen dough processor. "We lease for a variety of reasons: convenience, shorter term around time, tax reasons, balance sheet management." But, Viti said leasing also helps with labor. "We're in the position of growing and needing people. With leasing we acquired better equipment, faster, so we were able to reduce labor needed to produce our products and hired additional people to help sell them," he said. "Also, with freed up capital, we were able to offer more competitive salaries and benefits when recruiting for upper management and administrative positions." IT Market Spurred By Leasing The Global Insight study shows that, of the total $229 billion impact on equipment investment, more than one half ($122 billion) is concentrated in computer equipment. Industrial equipment categories - aircraft, especially transportation and industrial equipment - account for most of the balance. "Leasing is the smartest way to invest in IT. This strategy gets us into an IT refresh cycle and is an affordable way to have the latest technology working for us. Plus, leasing lets us spread our IT costs out over time," said Michael Strohmaier, IT Manager, Delicato Family Vineyards, one of the leading family winegrowers in America. Global Insight also estimated that an additional $120 billion accrues to the rest of the economy through additional spending on goods and services in markets that are peripheral to equipment markets. Several factors exist to show why leasing's fundamental contribution is critical, and why its value to the economy is so large, including: -- Leasing, as a way of acquiring the use of equipment, cuts across goods-producing and services-producing industries in the U.S. economy. -- Leasing is a crucial approach to acquiring a variety of equipment types, especially high-technology equipment, which is vital to innovation and growth. -- Leasing arrangements are used by all sizes of businesses, even though their capital requirements may differ. Fleming added, "Greater access to capital permits greater entry into markets than might occur without leasing. This third- party report reinforces what we knew: the leasing industry clearly has a significant, positive impact on the economy." ELA requested that Global Insight undertake the study to measure the value and contribution of the equipment leasing industry on the U.S. economy. Utilizing its state-of-the-art macroeconomic and industry models, Global Insight was able to evaluate the economic contribution to the U.S. economy. About The Equipment Leasing Association Organized in 1961, the Equipment Leasing Association (ELA) is the premier non-profit association representing companies involved in the dynamic equipment leasing and finance industry to the business community, government and media. As the voice of the leasing industry, ELA promotes the estimated $218 billion industry as a major source of funds for capital investment in the United States and abroad. ELA provides its members with comprehensive services, assists in the resolution of industry issues, educates financial decision-makers on the benefits of leasing and promotes high standards of business practices within the industry. ELA maintains an informational portal for financial decision-makers to learn more about leasing and find a leasing company at http://www.LeaseAssistant.org. Headquartered in Arlington, Va., ELA has more than 800 member companies and a staff of 25 professionals. For more information on ELA, please visit ELA Online at http://www.ELAOnline.com. About Global Insight Global Insight, Inc. (http://www.globalinsight.com/) is a privately-held company formed to bring together the two most respected economic analysis, forecasting and financial information companies in the world, DRI and WEFA. Global Insight provides the most comprehensive economic coverage of countries, regions and industries available, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. Global Insight collects and delivers economic and financial information to clients and also provides a broad range of consulting capabilities. With its April 2003 acquisition of World Markets Research Centre, Global Insight also provides the world's first same-day analysis and risk assessment service covering 196 countries and 4 industries, providing insightful analysis of market conditions and key events around the world. The company has over 3,300 clients in industry, finance and government with revenues in excess of $70 million, over 600 employees and 23 offices in 12 countries covering North and South America, Europe, Africa, the Middle East and Asia. --- Editor's note: Please visit ELA's Leasing4USA site (http://www.ELAOnline.com/Leasing4USA) to learn more about the equipment leasing industry. Additionally, visit http://www.elaonline.com/industryData/ELAEconomicContrib.pdf for the entire study, The Economic Contribution of the Equipment Leasing Industry to the U.S. Economy. Contact: Amy J. Holmes, CAE, Equipment Leasing Association; phone: 703-516-8367; e-mail: aholmes@elamail.com |