Equipment leasing and finance industry confidence eases in March

The Equipment Leasing & Finance Foundation, Washington, D.C., has released the March 2018 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 $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 72.2 in March, easing slightly from 73.2 in February.

When asked about the outlook for the future, MCI-EFI survey respondent Anthony Cracchiolo, president/CEO of U.S. Bank Equipment Finance, said, “We are seeing growth in capex [capital expenditure] spending across a broad segment of the economy. While some areas are expanding more quickly than others, all are moving in a positive direction. Businesses are more positive then we have seen in over a decade, and activity is picking up momentum. The equipment finance industry is healthy and poised to support the expanding economy.” When asked to assess their business conditions over the next four months, 54.8 percent of executives responding said they believe business conditions will improve, an increase from 46.4 percent in February. About 45 percent of respondents believe business conditions will remain the same over the next four months, a decrease from 53.6 percent the previous month. None believe business conditions will worsen, unchanged from the previous month.

Nearly 70 percent of survey respondents believe demand for leases and loans to fund capex will increase over the next four months, unchanged from February. About 32 percent believe demand will remain the same during the same four-month time period, relatively unchanged from 32.1 percent the previous month. None believe demand will decline, also unchanged from February.

Of the respondents, 22.6 percent expect more access to capital to fund equipment acquisitions over the next four months, down from 28.6 percent in February. A little more than 74 percent of executives indicate they expect the same access to capital to fund business—an increase from 67.9 percent last month—while 3.2 percent expect less access to capital, down slightly from 3.6 percent last month.

When asked, 41.9 percent of the executives report they expect to hire more employees over the next four months, a decrease from 42.9 percent in February. While 51.6 percent expect no change in head count over the next four months (a decrease from 53.6 percent last month), 6.5 percent expect to hire fewer employees, up from 3.6 percent in February.

Twenty-nine percent of the leadership evaluates the current U.S. economy as excellent, up from 25 percent last month. Seventy-one percent of the leadership evaluates the current U.S. economy as fair, down from 75.0 percent in February. None evaluate it as poor, unchanged from last month.

Just over 45 percent of the survey respondents believe that U.S. economic conditions will get better over the next six months, a decrease from 60.7 percent in February, while 3.2 percent believe economic conditions in the U.S. will get worse over the next six months, a slight decrease from 3.6 percent in February. Just over half of survey respondents indicate they believe the U.S. economy will stay the same in that timeframe, an increase from 35.7 percent the previous month.

In March, 51.6 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 53.6 percent in February. Another 45.2 percent believe there will be no change in business development spending, a decrease from 46.4 percent the previous month. Finally, 3.2 percent believe there will be a decrease in spending, an increase from none who believed so last month.