Equipment Lease Finance Industry Confidence Levels Off in March

WASHINGTON, D.C. (March 21, 2013) — The Equipment Leasing & Finance Foundation released the March 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 58.0, a slight decrease from the February index of 58.7, reflecting a leveling off in industry participants’ optimism after two consecutive increases.

When asked about the outlook for the future, MCI survey respondent Valerie Hayes Jester, president, Brandywine Capital Associates Inc., said, “In the short term, we see continued demand for equipment at a lessened pace than we did in the fourth quarter of 2012. 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 responding said they believe business conditions will improve over the next four months, up from 20% in February.  71.9% of respondents believe business conditions will remain the same over the next four months, down from 77.1% in February. 6.3% believe business conditions will worsen, up from 2.9% the previous month.

• 21.9% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 20% in February.  68.8% believe demand will “remain the same” during the same four-month time period, down from 77.1% the previous month.  9.4% believe demand will decline, up from 2.9% in February.

• 28.1% of executives expect more access to capital to fund equipment acquisitions over the next four months, 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.

• When asked, 25% of the executives reported they expect to hire more employees over the next four months, up from 22.9% in February. 71.9% expect no change in headcount over the next four months, up from 65.7% last month. 3.1% expect fewer employees, down from 11.4% of respondents who expected fewer employees in February.

• 84.4% of the leadership 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.”

• 15.6% of survey respondents believe that U.S. economic conditions will get “better” over the next six months, down from 22.9% in February. 71.9% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, down from 74.3% in February. 12.5% believe economic conditions in the U.S. will worsen over the next six months, an increase from 2.9% who believed so last month.

• In March, 31.3% of respondents indicate they believe their company will increase spending on business development activities during the next six months, 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.