Equipment Leasing & Finance Foundation

Equipment Finance Industry Monthly Confidence Increase Reflects Increasing Optimism

The Equipment Leasing & Finance Foundation (the Foundation) releases the May 2013 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. 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 56.7, an increase from the April index of 54, reflecting industry participants’ increasing optimism despite continuing concerns over the economy and the impact of federal policies on capital expenditures.

When asked about the outlook for the future, MCI survey respondent Aylin Cankardes, President, Rockwell Financial Group, said, “With strong liquidity in the market we are seeing lending extended to middle market credits again. Lessees continue to renew leases but for shorter periods of time as they are now becoming more interested in financing capital equipment to replace existing assets,”

May 2013 survey results

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

  • 9.7% of executives responding said they believe business conditions will improve over the next four months, up from 6.3% in April
  • 87.1% of respondents believe business conditions will remain the same over the next four months, up from 84.4% in April
  • 3.2% believe business conditions will worsen, down from 9.4% the previous month
  • 12.9% believe demand for leases and loans to fund capital expenditures (capex) will increase, relatively unchanged from 12.5% in April
  • 80.6% believe demand will “remain the same”, up from 75% the previous month
  • 6.5% believe demand will decline, down from 12.5% in April
  • 25.8% expect more access to capital to fund equipment acquisitions, up from 18.8% in April
  • 74.2% expect the “same” access to capital to fund business, a decrease from 81.3% the previous month
  • No one expects “less” access to capital, unchanged from April
  • 19.4% expect to hire more employees, a decrease from 25% in April
  • 71% expect no change in headcount, up from 65.6% last month
  • 9.7% expect fewer employees, relatively unchanged from 9.4% of respondents who expected fewer employees in April
  • 90.3% of the leadership evaluates the current U.S. economy as “fair,” up from 87.5% last month
  • 9.7% rate it as “poor,” a decrease from 12.5% in April

When asked to assess conditions over the next six months:

  • 32.3% believe that U.S. economic conditions will get “better”, an increase from 15.6% in April
  • 64.5% believe the U.S. economy will “stay the same”, down from 68.8% in April
  • 3.2% believe economic conditions in the U.S. will worsen, a decrease from 15.6% who believed so last month
  • 25.8% believe their company will increase spending on business development activities, a decrease from 31.3% in April
  • 74.2% believe there will be “no change” in business development spending, an increase from 68.8% last month
  • No one believes there will be a decrease in spending, unchanged from April