Equipment Leasing & Finance Foundation

Equipment Finance Industry Picking Back Up After Winter Slowdown

The Equipment Leasing & Finance Foundation (the Foundation) releases the May 2014 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) which showed confidence in the equipment finance market is 65.4, relatively unchanged from 65.1 last month, peaking at the highest index level in two years for the third consecutive month.

“We have experienced a transaction flow that appears to be returning to a more normal state after the winter slowdown," said Valerie Hayes Jester, President, Brandywine Capital Associates, Inc. "Companies seem to be getting back on track and ordering equipment that should have been delivered in the first quarter. I am still concerned with the longer term effects of the many changes in our healthcare system as well as still undetermined tax policies that have great impact on small businesses.”

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

  • 31.4% of executives responding said they believe business conditions will improve, down from 37% in April
  • 68.6% believe business conditions will remain the same, up from 60% in April
  • No one believes business conditions will worsen, down from 2.9% the previous month
  • 34.3% believe demand for leases and loans to fund capital expenditures (capex) will increase, down from 37% in April
  • 65.7% believe demand will “remain the same” during the same, up from 60% the previous month
  • No one believes demand will decline, down from 2.9% who believed so in April
  • 28.6% expect more access to capital to fund equipment acquisitions, unchanged from April
  • 71.4% expect the “same” access to capital to fund business, unchanged from the previous month
  • No one expects “less” access to capital, also unchanged from the previous month
  • 40% expect to hire more employees, an increase from 37% in April
  • 51.4% expect no change in headcount, down from 60% last month
  • 8.6% expect fewer employees, up from 2.9% who expected fewer employees in April
  • 2.9% of the leadership evaluates the current U.S. economy as “excellent,”
  • 91.4% of the leadership evaluates the current U.S. economy as “fair,”
  • 5.7% rate it as “poor,” all unchanged from April

When asked to assess conditions over the next six months:

  • 37% believe that U.S. economic conditions will get “better”, an increase from 34.3% who believed so in April
  • 62.9% believe the U.S. economy will “stay the same”, unchanged from April.
  • No one believes economic conditions in the U.S. will worsen over the next six months, a decrease from 2.9% who believed so last month
  • 45.7% believe their company will increase spending on business development activities, an increase from 40% in April
  • 54.3% believe there will be “no change” in business development spending, a decrease from 60% last month
  • No one believes 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 $827 billion equipment finance sector.