Global Insight Issues New Report on the Economic Impact of Equipment Leasing; Equipment Leasing Enables Billions in Real GDP, Creates Millions of Jobs In Other Industries Annually

ARLINGTON, Va.--Sept. 6, 2005--Global Insight has released a new study, The Economic Contribution of the Equipment Leasing Industry to the U.S. Economy: Growth, Investment, Jobs, that explains 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 the Equipment Leasing Association (ELA) in June 2005 as a method to quantify the importance of equipment lease financing beyond its own marketplace. A copy of the full study may be found at http://www.elaonline.com/industrydata/ELAEconContrib05.pdf

The study uses econometric models that represent both full and restricted adjustment scenarios(a) in order to show the range of effects the potential absence of leasing would have on the economy: in effect the best/worst-case scenarios. The results of the study show that, annually, over the 1997-2004 period, the equipment leasing industry's effect on the economy:

-- Produced at minimum $75 billion and as much as $315 billion additional real GDP.

-- Produced at minimum $160 billion and as much as $240 billion additional real equipment investment.

-- Created at minimum three million jobs, and as many as seven million additional jobs.

"The significance of Global Insight's findings is the tremendous impact equipment leasing has all along supply chains, not only within the equipment leasing industry," said Michael Fleming, who has led the association since 1979. "This report clearly shows that leasing doesn't operate in a vacuum. The effects of leasing's contributions are felt by manufacturers and suppliers of the equipment, and by downstream users who generate production with the equipment they acquire."

Supply Chains Affected

According to the study, leasing's fundamental contribution along equipment supply chains is demonstrated by the following factors:

-- 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 mechanism to acquire 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.

If Leasing Were Unavailable

Of equal significance to equipment leasing's importance to the economy is the impact the unavailability of lease financing would cause. According to the study, an absence of leasing would result in the following (in addition to the previously noted permanent reduction in real GDP of $75 billion annually):

-- An adverse affect on capital formation and substantially lower growth in equipment investment (a permanent reduction of $225 billion annually).

-- An overall higher cost of capital, which would induce a substitution toward lower-cost, used equipment, thus lowering the value of the capital stock due to prolonging the economic life of capital equipment.

-- An exclusion to businesses, especially smaller, new firms, since interest rates available to them would be higher than that of a prospective leasing company.

Fleming added, "Without the availability of leasing, investment in equipment, creation of jobs and growth in the economy would dramatically be impaired."

IT Equipment Needs Met By Leasing

Additionally, the Global Insight study shows that, of the total $225 billion impact on equipment investment, approximately one-half ($113 billion) is concentrated in information equipment, particularly computers. All capital goods equipment categories - aircraft, especially transportation and industrial equipment - account for most of the balance.

Utilizing its state-of-the-art macroeconomic and industry models, Global Insight was able to evaluate the economic contribution of equipment lease financing to the U.S. economy. A seven-year historical period was chosen as a sufficient period that would allow all of the dynamic effects in the economy to stabilize.

(a) In a full adjustment scenario, other substitutes are found for the absence of leasing to mitigate economic impacts. A partial adjustment scenario shows limited absorption by other industries when leasing is absent.

About ELA

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 forecasted $248 billion industry as a major source of funds for capital investment in the United States and abroad. Headquartered in Arlington, Va., ELA has more than 750 member companies and a staff of 25 professionals. For more information on ELA, please visit 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.