Equipment Leasing and Finance Industry Confidence Up in September

WASHINGTON, D.C. (Sept. 22, 2014)—The Equipment Leasing & Finance Foundation released the September 2014 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 equipment finance sector. Overall, confidence in the equipment finance market is 60.2, an increase from the August index of 58.9. 

When asked about the outlook for the future, MCI-EFI survey respondent Valerie Hayes Jester, president of Brandywine Capital Associates, Inc., said, “We are experiencing stronger demand than in the past several months, which bodes well for a strong fourth quarter.  There is still concern for yield erosion, but we look forward to concluding the year on a positive trend.”

 September 2014 Survey Results:

The overall MCI-EFI is 60.2, an increase from the August index of 58.9.

  • When asked to assess their business conditions over the next four months, 36.4 percent of executives responding said they believe business conditions will improve over the next four months, up from 18.2 percent in August.  60.6 percent of respondents believe business conditions will remain the same over the next four months, down from 78.8 percent in August. Three percent believe business conditions will worsen, unchanged from the previous month.
  • 30.3 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 21.2 percent in August. 66.7 percent believe demand will “remain the same” during the same four-month time period, down from 75.8 percent the previous month. Three percent believe demand will decline, unchanged from August.
  • 15.2 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, unchanged from August. 84.8 percent of survey respondents indicate they expect the same access to capital to fund business, and none expects “less” access to capital, both also unchanged from the previous month.
  • When asked, 30.3 percent of the executives reported they expect to hire more employees over the next four months, a decrease from 33.3 percent in August. 60.6 percent expect no change in headcount over the next four months, up from 57.6 percent last month. 9.1 percent expect fewer employees, unchanged from August.
  • 6.1 percent of the leadership evaluates the current U.S. economy as “excellent,” unchanged from last month. 87.9 percent of the leadership evaluates the current U.S. economy as “fair,” and 6.1 percent rate it as “poor,” both also unchanged from August.
  • 27.3 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 30.3 percent who believed so in August. 66.7 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, unchanged from August. 6.1 percent believe economic conditions in the U.S. will worsen over the next six months, up from 3 percent who believed so last month.
  • In September, 15.2 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 21.2 percent in August. 84.8 percent believe there will be “no change” in business development spending, an increase from 78.8 percent last month. None believe there will be a decrease in spending, unchanged from last month.

 The respondents are comprised of a wide cross section of industry executives, including large-ticket, middle-market and small-ticket banks, independents and captive equipment finance companies. The MCI-EFI uses the same pool of 50 organization leaders to respond monthly to ensure the survey’s integrity. Since the same organizations provide the data from month to month, the results constitute a consistent barometer of the industry’s confidence.

 

The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:

  1. Current business conditions
  2. Expected product demand over the next four months
  3. Access to capital over the next four months
  4. Future employment conditions
  5. Evaluation of the current U.S. economy
  6. U.S. economic conditions over the next six months
  7. Business development spending expectations
  8. Open-ended question for comment</li>

Survey results are posted on the Foundation website, leasefoundation.org.

 

 

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