Equipment Lease Finance Industry Confidence Improves in May
The Equipment Leasing & Finance Foundation recently released the May 2013 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). 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 56.7, an increase from the April index of 54.0, reflecting industry participants’ increasing optimism despite continuing concerns over the economy and the impact of federal policies on capital expenditures.
When asked about the outlook for the future, MCI survey respondent Aylin Cankardes, president, Rockwell Financial Group, said, “With strong liquidity in the market, we are seeing lending extended to middle market credits again. Lessees continue to renew leases but for shorter periods of time as they are now becoming more interested in financing capital equipment to replace existing assets.”
May 2013 Survey Results:
The overall MCI-EFI is 56.7.0, an increase from the April index of 54.0.
• When asked to assess their business conditions over the next four months, 9.7% of executives responding said they believe business conditions will improve over the next four months, up from 6.3% in April. 87.1% of respondents believe business conditions will remain the same over the next four months, up from 84.4% in April. 3.2% believe business conditions will worsen, down from 9.4% the previous month.
• 12.9% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, relatively unchanged from 12.5% in April. 80.6% believe demand will “remain the same” during the same four-month time period, up from 75% the previous month. 6.5% believe demand will decline, down from 12.5% in April.
• 25.8% of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 18.8% in April. 74.2% of survey respondents indicate they expect the “same” access to capital to fund business, a decrease from 81.3% the previous month. No one expects “less” access to capital, unchanged from April.
• When asked, 19.4% of the executives reported they expect to hire more employees over the next four months, a decrease from 25% in April. 71% expect no change in headcount over the next four months, up from 65.6% last month. 9.7% expect fewer employees, relatively unchanged from 9.4% of respondents who expected fewer employees in April.
• 90.3% of the leadership evaluates the current U.S. economy as “fair,” up from 87.5% last month. 9.7% rate it as “poor,” a decrease from 12.5% in April.
• 32.3% of survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 15.6% in April. 64.5% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, down from 68.8% in April. 3.2% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 15.6% who believed so last month.
• In April, 25.8% of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 31.3% in April. 74.2% believe there will be “no change” in business development spending, an increase from 68.8% last month. No one believes there will be a decrease in spending, unchanged from April.