After difficulties this year, next year looks to be better for the equipment finance industry as government legislation and investment in data centers and AI provide opportunities for financiers. 

The U.S. economy heads into 2026 resilient, with real gross domestic product growth of 1.8% and a 6.2% increase in equipment and software investment, according to the 2026 Equipment Leasing & Finance U.S. Economic Outlook, released today by the Equipment Leasing and Finance Foundation. Strong equipment demand, AI-driven capital spending and equity market strength should drive growth for the industry. 

Rather than a typical temporary cyclical downturn, after 2025 the equipment industry faces a systemic change, Michael Sharov, a partner in consulting firm Oliver Wyman’s Transportation and Advanced Industrials practice, told Equipment Finance News. Evolving channels, customer fragmentation, labor shortages, and digital and supplier realignment will drive change and create opportunities for dealers, lenders and OEMs. 

“Systemic change is going to happen, but the industries are not going to fall apart.” — Michael Sharov, transportation and advanced industrial partner, Oliver Wyman

The equipment industry can still prosper because they serve “essential use” industries such as food, infrastructure and materials, “so there is high confidence in recovery, as long as everyone does not hunker down, but uses this downturn,” he said.

Amid restructuring, lenders face battles around asset transparency, uptime and service capacity, changing underwriting factors, longer trade cycles and elevated importance of used equipment, even with the strong long-term outlook, Sharov said. 

In industries such as transportation, mergers and acquisitions will allow stronger players to pick up clients as capacity shifts across the industry, Anthony Sasso, head of TD Equipment Finance and senior vice president at TD Bank, told EFN. 

“There are more opportunities for companies to pick up good clients for those companies that are financially sound and well-heeled,” he said. “We’re seeing that today.” 

Equipment finance industry set for growth 

Meanwhile, the equipment finance industry appears set for growth in 2026 alongside the U.S. economy’s recovery following a year plagued by economic uncertainty, Cedric Chehab, chief economist at economic research firm BMI, said during a Dec. 11 webinar. 

Factors supporting industry growth include fiscal stimulus and bonus depreciation because of the One, Big, Beautiful Bill Act, additional Federal Reserve rate cuts that are anticipated, resilient corporate profitability and earnings, and especially, continued investment in AI and data centers, which could affect the economy on multiple levels, Chehab said. 

“When you combine the huge strengths of AI and the software around AI and the LLMs and how they interact with machines and robotics, they could boost productivity even further,” he said. “Many economies, and in particular the U.S. economy, are pursuing aggressive industrial policy, driving investment in cutting-edge technology, which will not only foster greater competition to a degree, but really accelerate the pace of development of these technologies.”

Deductions, depreciation under OBBBA

A full year under the One Big, Beautiful Bill Act, which was signed by President Donald Trump on July 4, should spur equipment investment, especially for the equipment sectors in need of recovery, according to a Nov. 19 Wells Fargo research note. 

“By making bonus depreciation permanent, firms can fully expense capital equipment, machinery and qualifying real estate improvements,” according to the note. “This change, along with other tax incentives, reduced policy uncertainty and lower borrowing rates, should provide support to investment growth next year and keep the CapEx cycle rolling.” 

While increased deductions, bonus depreciation and financing can improve liquidity to help pay for replacement assets, weak trucking and finance fundamentals mean the incentives alone may not be enough to drive new equipment purchases, TD’s Sasso said. 

“That’s probably one of the areas that, if you see an uptick in that, it may promote more CapEx spending, and this not only applies to the trucking vertical, but it’s for a number of other verticals,” he said. “If you see more CapEx spend, then you’d see the financing go along with that, and that’s where those benefits would kick in.” 

Data centers boost construction 

Investment in data centers and technology is also expected to continue in 2026, according to the Wells Fargo note. 

“The race to build out the next generation of AI capabilities with the latest information processing equipment, software and new data centers has led capital spending to charge ahead despite elevated policy uncertainty,” according to the note. “But this concentration in tech spending glosses over undeniable weakness in more traditional CapEx categories, such as transportation equipment and commercial construction.”

Data centers also require significant capital, with financing for U.S. data centers projected to reach $60 billion in 2025, according to a Dec. 11 release from the Equipment Leasing and Finance Foundation focused on data centers.  

In the wider construction segment, sentiment toward growth remains cautious in some regions, with nearly half of construction firms in the Minneapolis Federal Reserve region feeling more pessimistic than they did in mid-2025, Erick Luna, director of regional outreach for the region, said during a Dec. 12 webinar. 

“Some of the same challenges showed up in this change of outlook, a slowdown in projects, reduced RFPs, tariffs, etc.,” he said. “Almost half [of the firms] expected backlogs to keep contracting, and in turn, [fewer] projects will be completed and so on.” 

Equipment industry faces more challenges 

Meanwhile, executives rated the state of the industrials market a 5.7 out of 10, down from 8 last year, according to Oliver Wyman’s 2025 State of Industrial Goods North America, Non-Road report, released on Dec. 3. The report surveyed 105 equipment manufacturer executives in conjunction with the Association of Equipment Manufacturers. 

Looking ahead, indicators such as farm receipts, construction activity, residential starts and large data center projects will be central to assessing demand across agriculture and construction, Nate Savona, a partner in Oliver Wyman’s Transportation and Advanced Industrials practice, told EFN. 

“What we got from the members that we worked with who are living and breathing the industry is there is cautious optimism, but they’re not feeling great right now. The original sentiment for the [State of Industrial Goods] report was done six months ago or so, and then we revisited the question in the past month, and the sentiment was the same, so it hasn’t gotten better yet.” — Nate Savona, transportation and advanced industrial partner, Oliver Wyman

While the outlook for 2026 does come with optimism, BMI’s Chehab pointed to several risk factors, including: 

• A weakening labor market;  

• Higher-than-expected inflation;  

• Limited Fed easing due to inflation;  

• Financial market volatility due to a potential AI bubble;  

• Escalating trade tensions; and  

• Political uncertainty tied to midterm elections. 

Despite the challenges, there’s cautious optimism for 2026, with the potential rebound of the trucking industry on the back of improving values serving as a bellwether for the broader economy, TD’s Sasso said. 

“When you look at values, we may be in a trough right now where we’ve hit the bottom, and hopefully those valuations, we’re going to see coming back up,” he said. “Overall, there’s much more optimism going into 2026, and hopefully that is the case that would benefit all businesses, including ours.” 

Check out our exclusive industry data here.  

Finance professionals expect artificial intelligence (AI) to significantly disrupt the profession over the next two years, but few feel equipped to harness the full potential of those tools.

New data from the AICPA and CIMA’s Future-Ready Finance: Technology, Productivity, and Skills Survey Report revealed a significant gap between finance professionals’ expectations of AI’s impact and their organisations’ readiness to adopt it.

The majority of respondents (56%) said generative AI has become the most prominent skills gap for their organisations in 2025. Overall, IT/tech skills also emerged as a leading priority (47%) this year, despite being considered a secondary concern (20%) in 2021.

“This highlights a strategic shift towards using advanced technology as a means of enhancing value and efficiency, rather than simply supporting operations,” the survey said.

However, many organisations are still struggling to shift gears. The survey found that while 88% believe AI will be the most transformative technology trend in accounting and finance over the next 12 to 24 months, only 8% said their organisation is “very well prepared” to manage this transformation.

The AICPA and CIMA surveyed more than 1,400 members in senior finance and accounting roles globally in August and September.

The biggest barrier to technology adoption for companies this year was a lack of human capital, skills, and talent (50%), followed by safety and security concerns (47%) and doubts about technology maturity (42%).

“The advance of AI tools in the last two years is enabling a paradigm shift in how finance teams operate and the work they can do to generate value for their organisations,” Andrew Harding, FCMA, CGMA, chief executive–Management Accounting at the Association of International Certified Professional Accountants, said in a news release. “While professionals recognise the potential on offer, many today feel underprepared and under-skilled. There’s a clear gap between anticipating disruption and taking action.”

To address skills gaps in finance teams, organisations favoured internal training programmes (62%) ahead of external training programmes (45%) and hiring new talent (35%), according to respondents. On-the-job training was ranked the most effective upskilling approach (61%) amongst finance professionals.  

Internal training can be flexible, hands-on, and adaptive, often developing through experimentation and adjustment. But while hiring can be seen as a reactive strategy that does not solve the industry-wide skills shortage, the survey said, it is often a necessary step for driving innovation, especially when internal capabilities are limited.

Other key findings from the survey:

Productivity deficits hold back adoption. Lack of skills (41%) and low motivation (37%) were the top barriers to productivity, the release said, followed by incompatible technology systems and poor coordination in tech implementation (both at 32%).

Skills shortages extend beyond gen AI. Broader technology skills (AI, big data, cloud, Internet of Things, robotics) remain a concern (37%), alongside data and analytics (36%), the release said. Significant gaps also persist in areas such as communication, influencing, and critical thinking (33%) and business partnering (32%).

Learning preferences should guide skills strategy. “The dominance of internal training and the strong preference for on-the-job learning indicate a clear path forward,” the survey said. “Strategic investment must be channelled into practical, accessible, and continuous upskilling programmes and collaborative projects to bridge the readiness gap and unlock productivity gains.”

— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.

CHICAGO (WLS) — A Chicago City Council committee approved an alternative budget plan brought by a group of alderpersons on Tuesday.

A group of alderpersons presented the plan, which more than half of city council members are currently supporting, during Tuesday’s Finance Committee meeting.

ABC7 Chicago is now streaming 24/7. Click here to watch

The substitute budget ordinance faced scrutiny from supporters of Mayor Brandon Johnson’s budget during the hearing, which lasted several hours.

The alternate budget group is looking to build support for their plan even as they put additional council meetings on the schedule, including meetings this weekend and on Christmas Eve.

The Finance Committee meeting revealed some new revenue options for the 2026 budget proposal and tweaked some others.

It includes raising the plastic shopping bag tax from $0.10 to $0.15, and a pilot program to put advertising on bridge houses as well as light poles.

RELATED | Chicago City Council revises alternative budget proposal, mayor defends head tax as deadline looms

It officially gets rid of the corporate head tax, which has been a major source of contention since Johnson first presented his budget plan. The mayor and his allies are insisting that corporations pay more.

“What you have here is balancing the budget with fines and fees and taking out the corporate head tax. I want to hear your rationale to do that,” said 25th Ward Ald. Byron Sigcho-Lopez.

“Our proposal, in terms of new revenues, impacts businesses at 84% and individuals at 16%. I want everybody to take a look at this for a minute,” said Budget Committee Vice Chair Ald. Nicole Lee.

The alternative budget group says this plan is 98% in line with Johnson’s. Still, some of his allies were frustrated at not seeing the numbers sooner.

READ MORE | Chicago budget discussions reach stalemate, raising possibility of 1st-ever city government shutdown

“This is our first time reviewing this. This is incredibly disrespectful,” said 35th Ward Ald. Anthony Quezada.

There were also questions about the alternate plan to sell off outstanding debt to raise nearly $90 million. The city comptroller cautioned against it.

“I would say is that I would not. I would not rely on $89 million in this budget. This has never been done by any state,” said Chicago Comptroller Michael Belsky.

But supporters are defending this plan as worthy of consideration calling projections conservative and balanced.

“The group that’s worked on this has spent hundreds of hours bringing in the majority of the city council to talk about this,” said 19th Ward Ald. Matt O’Shea. “We relied on the advice and counsel of budgetary experts.”

The alternative budget plan passed out of finance committee 22-13. Its next stop is the Budget Committee on Wednesday.

It is clear that this breakaway group is flexing its muscle. What’s not clear is what the mayor’s next move will be.

But we now have city council meetings planned for Thursday, Friday, Saturday, and then, Tuesday and Wednesday of next week.

Johnson issued a statement on Tuesday evening, saying, “As the leaders of the Alternative Group made clear throughout their presentation, the Secret Budget that passed out of the Finance Committee this afternoon is substantially similar to the proposal we introduced more than two months ago.

At our insistence, the Alternative Group agreed to restore the cuts they made to youth employment, and they removed the proposal to double the garbage tax. They have finally conceded to some degree, the point that I have made from the beginning: that corporations must pay their fair share in order to protect Chicagoans at this moment.

Unfortunately, at the behest of certain corporate interests, they chose to replace a tax on the largest corporations with $90M+ in “enhanced debt collections” on everyday Chicagoans. This seems to be in direct contradiction with their expressed desires to shift the financial burden away from working people.

Not only is this proposal immoral, it is simply not feasible. There is no way to sell off Chicagoans’ debts that would yield that amount of revenue. If passed as is, this proposal would likely result in a significant midyear budget shortfall and leave Chicagoans vulnerable to deep cuts to city services.

We will spend the next few days with our budget, finance, legal, and policy teams reviewing these proposals. Chicago cannot afford a government shutdown when we are making so much progress growing our economy and reducing violent crime to historic lows.

Tomorrow, the Budget Committee will review their proposal publicly so that Chicagoans can understand exactly what is in this Secret Budget.”