Equipment Leasing & Finance Foundation

Equipment Leasing Industry Sees Confidence Up for Fourth Consecutive Month

The Equipment Leasing & Finance Foundation (the Foundation) releases the August 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 61.0, an increase from the July index of 59.4, and the fourth consecutive increase of the MCI-EFI.

Survey: Executives Believe Business and Economic Conditions Will Improve in the Coming Months

When asked about the outlook for the future, MCI survey respondent William Verhelle, Chief Executive Officer, First American Equipment Finance, said, “We see continued, gradual economic improvement in equipment finance activity across all our markets. Large, creditworthy obligors continue to finance major equipment acquisitions to retain flexibility and preserve capital. Our portfolio performance couldn't be much better, with record low charge-offs and delinquencies. We remain cautiously optimistic about the remainder of 2013 and 2014.”

August 2013 survey results:

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

  • 32.4% of executives responding said they believe business conditions will improve, up from 25% in July
  • 67.6% believe business conditions will remain the same, down from 71.9% in July
  • No one believes business conditions will worsen, down from 3.1% the previous month
  • 23.5% believe demand for leases and loans to fund capital expenditures (capex) will increase, up from 15.6% in July
  • 76.5% believe demand will “remain the same”, down from 81.3% the previous month
  • No one believes demand will decline, down from 3.1% in July
  • 20.6% expect more access to capital to fund equipment acquisitions, down from 21.9% in July
  • 79.4% expect the “same” access to capital to fund business, an increase from 78.1% the previous month
  • No one expects “less” access to capital, unchanged from July
  • 29.4% expect to hire more employees, an increase from 25% in July
  • 64.7% expect no change in headcount, down from 68.8% last month
  • 5.9% expect fewer employees, down from 6.3% of respondents who expected fewer employees in July
  • 91.2% of the leadership evaluates the current U.S. economy as “fair,” up from 90.6% last month
  • 8.8% rate it as “poor,” down slightly from 9.4% in July 

When asked to assess conditions over the next six months:

  • 26.5% believe that U.S. economic conditions will get “better”, a decrease from 34.4% in July
  • 70.6% believe the U.S. economy will “stay the same”, an increase from 62.5% in July
  • 2.9% believe economic conditions in the U.S. will worsen, down slightly from 3.1% who believed so last month
  • 29.4% believe their company will increase spending on business development activities, a decrease from 31.3% in July
  • 70.6% 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 July