Revenue will improve as downstream companies focus on upgrades and cutting costs.
California (PRWEB) September 05, 2013
The Computer and Printer Leasing industry lends its services to a variety of clients. Companies and government entities can cut costs by using variable leasing options instead of facing the possible cash flow problems associated with using scarce funds for purchases. The ability to use and return rented equipment within various timeframes encourages businesses and government organizations to move away from high fixed assets and costs.
By offering these services, the industry is sensitive to trends in fixed capital spending by business and government sectors, which are influenced by changes in business and consumer sentiment and economic activity. Changes in real interest rates and tax laws that directly affect financing and leasing costs are also significant. “The industry faces competition from used office equipment, which increased in supply as businesses went bankrupt during the recession,” says IBISWorld says IBISWorld industry analyst Andrew Krabeepetcharat. As a result of these factors, IBISWorld expects that revenue will decline at an annualized rate of 0.7% to $6.5 billion over the five years to 2013, with a 3.8% increase expected in 2013. Similarly, average industry profit has declined over the past five years. However, due to consolidation and international expansion by major operators, industry profit is expected to increase to 6.2% of revenue in 2013.
Industry growth is derived from the outsourcing of office equipment purchases. Companies have been particularly affected by the increasing popularity of multifunction centers (MFCs). Equipment prices continue to decline, but the adoption of technology is encouraging competition within the industry. Rapidly advancing technology is increasing the amount of obsolete equipment and lowering residual sale values for owned equipment, thereby assisting growth among industry firms.
Higher corporate profit and a more stable financial environment during the next five years will allow businesses to spend more on outsourcing office equipment. According to Krabeepetcharat, “the national economy is expected to recover sluggishly over the five years to 2018, and industry revenue is forecast to grow in line with this general trend.” Technological change and the rapid expansion of office technology products will benefit the industry as businesses use a wider selection of computer and printer leasing services.