Equipment Leasing & Finance Foundation

Equipment Lease Finance Industry Confidence Sees Little Change in August 2012

The Equipment Leasing & Finance Foundation (the Foundation) released the August 2012 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. Overall, confidence in the equipment finance market is 50.2, down from the July index of 51.5, reflecting ongoing industry concerns over economic, regulatory and political uncertainty. 

"My long term view of the equipment finance industry is strong; the shorter term view of the U.S. economy and worldwide economy is volatile," said survey respondent John McQueen, executive vice president and head of Wells Fargo Equipment Finance. "The U.S. economic growth rate and the stability for the economy will continue to slow business investment."

August 2012 Survey Results

When asked to assess their business conditions over the next four months, here is what survey respondents said:

Business conditions:

  • 6.3% of executives said they believe business conditions will improve over the next four months, down slightly from 6.5% in July
  • 78.1% of respondents believe business conditions will remain the same over the next four months, up from 71% in July
  • 15.6% believe business conditions will worsen, down from 22.6% the previous month

Demand for leases and loans to fund capital expenditures (capex):

  • 6.3% believe demand will increase over the next four months, a decrease from 12.9% in July
  • 75% believe demand will “remain the same” during the same four-month time period, up from 71% the previous month
  • 18.8% believe demand will decline, up from 16.1% in July

Access to capital to fund equipment acquisitions:

  • 15.6% expect more access to capital over the next four months, down from 19.4% in July
  • 84.4% expect the “same” access to capital, an increase from 77.4% the previous month
  • No survey respondents expect “less” access to capital, down from 3.2% who expected less access in July

Hiring more employees:

  • 31.3% expect to hire more employees over the next four months, down from 35.5% in July
  • 65.6% expect no change in headcount over the next four months, up from 64.5% last month
  • 3.1% expect fewer employees, up from no respondents who expected fewer employees in July

Evaluation of current U.S. economy:

  • 68.8% of the leadership evaluates the current U.S. economy as “fair,” down from 71% last month
  • 31.3% rate it as “poor,” up from 29% in July
  • 6.3% believe that U.S. economic conditions will get “better” over the next six months, down from 9.7% in July
  • 78.1% believe the U.S. economy will “stay the same” over the next six months, up from 71% in July
  • 15.6% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 19.4% who believed so last month

Spending on business development activities:

  • 15.6% believe their company will increase spending on business development activities during the next six months, down from 25.8% in July
  • 81.3% believe there will be “no change”, up from 71% last month
  • 3.1% believe there will be a decrease in spending, unchanged from last month

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.