Equipment Lease Finance Industry Confidence Declines

The Equipment Leasing & Finance Foundation has released its October 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 54.0, a decline from the September index of 61.3, demonstrating the negative impact of the federal government’s budget response on an otherwise steady industry outlook.

 

When asked about the outlook for the future, MCI survey respondent Valerie Hayes Jester, president, Brandywine Capital Associates, Inc., says, “The future of the industry remains optimistic. My larger concern is for the future of our country and the inability of our government to lead. Ultimately, the stalemate in Washington will have a negative effect on our economy in the short run. My hope is that we can get small business back on track and investing again in equipment in 2014.”

 

When asked to assess their business conditions over the next 4 months, 11% of executives responding said they believe business conditions will improve over the next 4 months, down from 30.3% in September. However, 74% of respondents believe business conditions will remain the same over the next four months, up from 66.7% in September, and 15% believe business conditions will worsen, up from 3% who believed so the previous month.

 

When asked, 33.3% of the executives reported they expect to hire more employees over the next four months, a decrease from 36.4% in September. Exactly two-thirds of respondents expect no change in headcount over the next four months, up from 60.6% last month. No one expects fewer employees, down from 3% of respondents who expected fewer employees in September. 

 

In the latest poll, 85.2% of the leadership evaluates the current U.S. economy as “fair,” down from 90.9% last month, while 15% rate it as “poor,” up from 9% in September.

 

None of the of survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 18.2% in September. Notably, 89% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next 6 months, an increase from 79% in September while 11% believe economic conditions in the U.S. will worsen over the next 6 months, up from 3% last month. 

 

In October, one-third of respondents indicate they believe their company will increase spending on business development activities during the next 6 months, an increase from 30.3% in September. Two-thirds of respondents believe there will be “no change” in business development spending, unchanged from last month. No one believes there will be a decrease in spending, down from 3% who believed so in September. 

 

Survey results are posted on the Foundation website, as are survey respondent demographics and additional information about the MCI.