The Equipment Leasing & Finance Foundation (the Foundation) released the November 2011 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). Overall, confidence in the equipment finance market is 57.4, up from the October index of 50.7, indicating an increase in optimism about business activity despite ongoing concerns about the global economic situation. 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.
"The strong 2011 results for the industry can be attributed to historically low interest rates and the availability of 100 percent bonus depreciation. Whether this momentum can be sustained in 2012 is still a question mark," said survey respondent Thomas Jaschik, President, BB&T Equipment Finance.
November 2011 Survey Results:
- When asked to assess their business conditions over the next four months, 18.9% of executives responding said they believe business conditions will improve over the next four months, up from 9.8% in October. 75.7% of respondents believe business conditions will remain the same over the next four months, a decrease from 80.5% in October. 2.0% of executives believe business conditions will worsen, a decrease from 9.8% in October.
- 24.3% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 17.1% in October. 70.3% believe demand will "remain the same" during the same four-month time period, up from 68.3% the previous month. 5.4% believe demand will decline, down from 14.6% who believed so in October.
- 27.0% of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 12.2% in October. 73.0% of survey respondents indicate they expect the "same" access to capital to fund business, a decrease from 87.8% the previous month. No survey respondents expect "less" access to capital, unchanged from October.
- When asked, 16.2% of the executives reported they expect to hire more employees over the next four months, up from 14.6% in October. 75.7% expect no change in headcount over the next four months, a decrease from 78% last month, while 8.1% expect fewer employees, an increase from 7.3% in October.
- 75.7% of the leadership evaluates the current U.S. economy as "fair," an increase from 58.5% last month. 24.3% rate it as "poor," down from 41.5% in October.
- 13.5% of survey respondents believe that U.S. economic conditions will get "better" over the next six months, up from 4.9% in October. 86.5% of survey respondents indicate they believe the U.S. economy will "stay the same" over the next six months, up from 78.0% in October. No one responded that they believe economic conditions in the U.S. will worsen over the next six months, an improvement from 17.1% who believed so last month.
- In November, 32.4% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 26.8% in October. 67.6% believe there will be "no change" in business development spending, down from 68.3% last month, and no one believes there will be a decrease in spending, down from 4.9% one who believed so last month.