Equipment Leasing & Finance Foundation

Equipment Lease Finance Industry Confidence Dips At Year-end

The Equipment Leasing & Finance Foundation (the Foundation) releases the December 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 $827 billion equipment finance sector. Overall, confidence in the equipment finance market is 55.8, a decrease from the November index of 56.9, reflecting industry concerns over uncertainty regarding capital expenditures (capex) and competitive market pressures in 2014, among other issues.

When asked about the outlook for the future, MCI survey respondent Anthony Cracchiolo, President and Chief Executive Officer, Vendor Services, U.S. Bank Equipment Finance, said, “The overall environment continues to be driven by uncertainty. The equipment finance industry is stable with low single digit growth. The industry is well positioned to address increasing demand when the economy improves evidenced by a higher GDP growth rate. There are no indicators currently that suggest stronger growth in the near term."

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

  • 12% believe business conditions will improve over the next four months, down from 17.2% in November
  • 78.8% believe business conditions will remain the same over the next four months, down from 79.3% in November
  • 9% believe business conditions will worsen, up from 3.4% who believed so the previous month
  • 15.2% believe demand for leases and loans to fund capex will increase, up from 13.8% in November
  • 78.8% believe demand will “remain the same”, up from 75.9% the previous month
  • 9% believe demand will decline, down from 10.3% who believed so in November
  • 24% expect more access to capital to fund equipment acquisitions, unchanged from November
  • 75.8% expect the “same” access to capital to fund business, up from 72.4% in November
  • No one expects “less” access to capital, down from 3.4% who expected less access in November
  • 27.3% expect to hire more employees, unchanged from November
  • 60.6% expect no change in headcount, down from 65.5% last month
  • 12% expect fewer employees, up from 6.9% who expected fewer employees in November
  • 6% evaluates the current U.S. economy as “excellent,” unchanged from last month
  • 85% evaluates the current U.S. economy as “fair,” up from 76% last month
  • 9% rate it as “poor,” down from 17% in November

When asked to assess conditions over the next six months:

  • 24.2% believe that U.S. economic conditions will get “better”, an increase from 17.2% who believed so in November
  • 66.7% believe the U.S. economy will “stay the same”, a decrease from 72.4% in November
  • 9% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 10.3% last month
  • 30.3% believe their company will increase spending on business development activities, a decrease from 34.5% in November
  • 66.7% believe there will be “no change” in business development spending, an increase from 65.5% last month
  • 3% believe there will be a decrease in spending, an increase from no one who believed so last month