Equipment Leasing and Finance Industry Confidence Levels Near Two-Year High

February 25th, 2014 by DWM Magazine

The Equipment Leasing and Finance Foundation released its February 2014 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). Overall, confidence in the equipment finance market is 63.3, the second highest index in two years, though it is a decrease from last month’s two-year index high of 64.9.

According to the report, when asked to assess their business conditions over the next four months, 21.2 percent of executives responding said they believe business conditions will improve over the next four months, down from 33 percent in January. Of the respondents, 72.7 percent believe business conditions will remain the same over the next four months, up from 61 percent in January. The number of those surveyed who believe business conditions will worsen was at 6.1 percent, up from 5.6 percent who believed so the previous month.

Additionally, 24.2 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 36 percent in January. Another 69.7 percent believe demand will “remain the same” during the same four-month time period, up from 61 percent the previous month.  The percentage of those who believe demand will decline also increased, up to 6.1 percent from 2.8 percent in January.

Executives who expect more access to capital to fund equipment acquisitions over the next four months, was at 31.3 percent, up from 25 percent in January, while 65.6 percent of survey respondents indicate they expect the “same” access to capital to fund business, down from 75 percent in January. Additionally, 3.1 percent expect “less” access to capital, up from no one who expected less access the previous month.

When asked, 40.6 percent of the executives reported they expect to hire more employees over the next four months, an increase from 33 percent in January. Another 53 percent expect no change in headcount over the next four months, down from 58.3 percent last month and 6.3 percent expect fewer employees, down from 8.3 percent who expected fewer employees in January.

Three percent of the leadership evaluates the current U.S. economy as “excellent,” relatively unchanged from 2.8 percent last month. The current U.S. economy was evaluated as “fair,” by 93.8 percent, down slightly from 94.4 percent last month. Three percent rate it as “poor,” also relatively unchanged from last month.

Of the of survey respondents, 34.4 percent believe that U.S. economic conditions will get “better” over the next six months, a decrease from 41.7 percent who believed so in January. Another 59.4 percent indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 55.6 percent in January. However, according to 6.2 percent of respondents, economic conditions in the U.S. will worsen over the next six months, an increase from 2.6 percent last month.

In February, 56.3 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 55.6 percent in January while 43.8 percent believe there will be “no change” in business development spending, an increase from 39 percent last month. No one believes there will be a decrease in spending, a decrease from 5.6 percent who believed so last month.

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