Equipment finance industry confidence holds steady

Source: Equipment Leasing & Finance Foundation

Jan 25, 2012

The Equipment Leasing & Finance Foundation has released the December 2011 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). Designed to collect leadership data, the index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $628 billion equipment finance sector. Overall, confidence in the equipment finance market is 57.2, a nominal decrease from the November index of 57.4, indicating steadying optimism about business activity despite ongoing concerns about the global economic situation.

When asked about the outlook for the future, survey respondent Rick Remiker, President, Huntington Equipment Finance, said, “The equipment leasing and finance industry has held its own over the past few quarters and favorably weathered several macroeconomic challenges. 2012 may bring greater opportunities as companies replace aged equipment and invest in newer technology and expanded capacity.”

December 2011 Survey Results:

  • The overall MCI-EFI is 57.2, a decrease from the November index of 57.4.
  • When asked to assess their business conditions over the next four months, 22.2% of executives responding said they believe business conditions will improve over the next four months, up from 18.9% in November. 75.0% of respondents believe business conditions will remain the same over the next four months, relatively unchanged from 75.7% in November. 2.8% of executives believe business conditions will worsen, a slight increase from 2.0% in November.
  • 19.4% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, a decrease from 24.3% in November. 80.6% believe demand will “remain the same” during the same four-month time period, up from 70.3% the previous month. No one believes demand will decline, down from 5.4% who believed so in November.
  • 22.2% of executives expect more access to capital to fund equipment acquisitions over the next four months, down from 27.0% in November. 75.0% of survey respondents indicate they expect the “same” access to capital to fund business, an increase from 73.0% the previous month. 2.8% of survey respondents expect “less” access to capital, up from zero percent in November.
  • When asked, 22.2% of the executives reported they expect to hire more employees over the next four months, up from 16.2% in November. 69.4% expect no change in headcount over the next four months, a decrease from 75.7% last month, while 8.3% expect fewer employees, relatively unchanged from 8.1% in November.
  • 75.0% of the leadership evaluates the current U.S. economy as “fair,” down slightly from 75.7% last month. 25.0% rate it as “poor,” up slightly from 24.3% in November.
  • 19.4% of survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 13.5% in November. 77.8% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, down from 86.5% in November. 2.8% responded that they believe economic conditions in the U.S. will worsen over the next six months, an increase from no one who believed so last month.
  • In December, 22.2% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 32.4% in November. 77.8% believe there will be “no change” in business development spending, up from 67.6% last month, and no one believes there will be a decrease in spending, unchanged from last month.
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