Equipment Leasing & Finance Foundation

Confidence in Equipment Finance Market Levels Off in March

The Equipment Leasing & Finance Foundation (the Foundation) releases the March 2013 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 $725 billion equipment finance sector. Overall, confidence in the equipment finance market is 58.0, a slight decrease from the February index of 58.7, reflecting a leveling off in industry participants’ optimism after two consecutive increases. 

“In the short term, we see continued demand for equipment at a lessened pace than we did in the fourth quarter of 2012," said MCI survey respondent Valerie Hayes Jester, president, Brandywine Capital Associates, Inc. "Until the issues in Washington regarding the budget are resolved, we don't expect the economy to move forward at a pace that sustains strong demand for equipment acquisition.” 

March 2013 survey results

When asked to assess their business conditions over the next four months:

  • 21.9% of executives said they believe business conditions will improve, up from 20% in February
  • 71.9% of respondents believe business conditions will remain the same, down from 77.1% in February
  • 6.3% believe business conditions will worsen, up from 2.9% the previous month
  • 21.9% believe demand for leases and loans to fund capital expenditures (capex) will increase, an increase from 20% in February
  • 68.8% believe demand will “remain the same”, down from 77.1% the previous month
  • 9.4% believe demand will decline, up from 2.9% in February
  • 28.1% expect more access to capital to fund equipment acquisitions, up from 22.9% in February
  • 68.8% of survey respondents indicate they expect the “same” access to capital to fund business, a decrease from 77.1% the previous month
  • 3.1% expect “less” access to capital, up from zero percent of respondents in February
  • 25% expect to hire more employees, up from 22.9% in February
  • 71.9% expect no change in headcount, up from 65.7% last month
  • 3.1% expect fewer employees, down from 11.4% of respondents who expected fewer employees in February

Respondents also evaluated the current U.S. economy.

  • 84.4% evaluates the current U.S.economy as “fair,” down from 85.7% last month
  • 12.5% rate it as “poor,” up from 11.4% in February
  • One survey respondent rated the current economy as “excellent”

When asked to assess conditions over the next six months:

  • 15.6% believe that U.S.economic conditions will get “better”, down from 22.9% in February
  • 71.9% indicate they believe the U.S.economy will “stay the same”, down from 74.3% in February
  • 12.5% believe economic conditions in the U.S.will worsen, an increase from 2.9% who believed so last month
  • 31.3% believe their company will increase spending on business development activities, down from 37.1% in February
  • 68.8% believe there will be “no change” in business development spending, up from 60% last month
  • No one believes there will be a decrease in spending, down from 2.9% who believed so last month