The Equipment Leasing & Finance Foundation (the Foundation) releases the July 2019 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 was 57.9, an increase from the June index of 52.8.
When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, CLFP, president and CEO, Wintrust Specialty Finance, says, “The metrics remain solid for the U.S. economy and specifically small business lending. Our application volume continues to grow and conversion rates are strong. The inherent risk in the portfolio continues to be good and performance continues as it has been, with extremely low defaults. My concerns continue to be overly aggressive credit quality and pricing in the overall market. These historically are the indicators of challenges to come, and therefore we remain focused on these metrics in our business.”
When asked to assess their business conditions over the next four months, 10% of executives responding said they believe business conditions will improve over the next four months, up from 3.3% in June. 83.3% of respondents believe business conditions will remain the same over the next four months, an increase from 80% the previous month. 6.7% believe business conditions will worsen, a decrease from 16.7% in June.
When asked, 33.3% of the executives report they expect to hire more employees over the next four months, an increase from 30% in June. 63.3% expect no change in headcount over the next four months, unchanged from last month. 3.3% expect to hire fewer employees, down from 6.7% last month.
“I'm optimistic because low unemployment should be leading to increased wages and consumer spending, which should continue to drive the economy. I’m concerned about delayed impacts of trade wars negatively affecting product prices and stanching demand for capital and consumer goods,” says Quentin Cote, CLFP, president, Mintaka Financial, LLC.
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