Economics

Confidence In Equipment Finance Industry Ebbs

By Chemical Processing Staff

Dec 28, 2018

The Equipment Leasing & Finance Foundation (the Foundation) releases the December 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 eased again in December to 55.5, a decrease from the November index of 58.5.

“We are experiencing a strong close to the year. Many of our customers are expanding their businesses and therefore investing in equipment for the long term,” says MCI-EFI survey respondent Valerie Hayes Jester, president, Brandywine Capital Associates, when asked about the outlook for the future. “2019 is looking a bit unstable at the moment. The manic stock market coupled with uncertain tariff and trade policies seem to be indicating economic instability for the coming year. The sector of the industry we service really mirrors consumer sentiment. The last 30 days have shown that the drivers to that market may be losing momentum. Couple that with potentially rising interest rates and tax benefits that are short lived, and we may see a slowdown in the near future.”     

Among the December 2018 survey results:

• When asked to assess their business conditions over the next four months, 13.8% of executives responding said they believe business conditions will improve over the next four months, an increase from 10.7% in November. 65.5% of respondents believe business conditions will remain the same over the next four months, a decrease from 78.6% the previous month. 20.7% believe business conditions will worsen, an increase from 10.7% who believed so the previous month.

• 3.5% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, a decrease from 7.1% in November. 79.3% believe demand will “remain the same” during the same four-month time period, a decrease from 82.1% the previous month. 17.2% believe demand will decline, up from 10.7% who believed so in November.

• 17.2% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 14.3% in November. 75.9% of executives indicate they expect the “same” access to capital to fund business, a decrease from 85.7% last month. 6.9% expect “less” access to capital, up from none last month.

• When asked, 44.8% of the executives report they expect to hire more employees over the next four months, an increase from 42.9% in November. 44.8% expect no change in headcount over the next four months, a decrease from 46.4% last month. 10.3% expect to hire fewer employees, down slightly from 10.7% last month. 

For more information, visit: www.leasefoundation.org