Equipment Leasing & Finance Industry Confidence Eases in April

WASHINGTON (April 20, 2017) – The Equipment Leasing & Finance Foundation (the Foundation) releases the April 2017 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 $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 65.8, easing from the March index of 71.1.

When asked about the outlook for the future, MCI-EFI survey respondent Paul Menzel, president and CEO of Financial Pacific Leasing Inc., an Umpqua Bank Company, said, “I believe our industry is in a good place given portfolio performance, access to capital and general economic stability. However, the supply and demand imbalance is causing spreads to stay compressed and credit requirements to be relaxed in order to meet growth expectations. This equation is not healthy in the long run.”

April 2017 Survey Results:
The overall MCI-EFI is 65.8, a decrease from the March index of 71.1.

• When asked to assess their business conditions over the next four months, 36.7 percent of executives responding said they believe business conditions will improve over the next 4 months, a decrease from 70 percent in March. 63.3 percent of respondents believe business conditions will remain the same over the next 4 months, an increase from 20 percent in March. None believe business conditions will worsen, a decrease from 10 percent the previous month.
• 40 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next 4 months, a decrease from 70 percent in March. 56.7 percent believe demand will “remain the same” during the same 4-month time period, up from 20 percent the previous month. 3.3 percent believe demand will decline, down from 10 percent who believed so in March.
• 16.7 percent of the respondents expect more access to capital to fund equipment acquisitions over the next 4 months, unchanged from March. 80 percent of executives indicate they expect the “same” access to capital to fund business, and 3.3 percent expect “less” access to capital, both also unchanged from last month.
• When asked, 40 percent of the executives report they expect to hire more employees over the next 4 months, a decrease from 43.3 percent in March. 53.3 percent expect no change in headcount over the next four months, unchanged from last month. 6.7 percent expect to hire fewer employees, up from 3.3 percent in March.
• None of the leadership evaluate the current United States economy as “excellent,” unchanged from last month. 100 percent of the leadership evaluate the current U.S. economy as “fair,” and none evaluate it as “poor,” both also unchanged from March.
• 46.7 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next 6 months, a decrease from 60 percent in March. 53.3 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 36.7 percent the previous month. None believe economic conditions in the U.S. will worsen over the next 6 months, down from 3.3 percent who believed so last month.
• In April, 46.7 percent of respondents indicate they believe their company will increase spending on business development activities during the next 6 months, a decrease from 50 percent in March. 53.3 percent believe there will be “no change” in business development spending, an increase from 50 percent the previous month. None believe there will be a decrease in spending, unchanged from last month.

For more information, visit the Foundation.