Economics

Equipment Finance Industry Confidence Ticks Up In May

By Chemical Processing Staff

May 20, 2019

The Equipment Leasing & Finance Foundation (the Foundation) releases the May 2019 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), showing that confidence in the equipment finance market improved in May to 59.2, up from the April index of 58.3. 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. This month reportedly marks the 10th anniversary of the MCI-EFI, which was launched in the wake of the 2008 recession to provide industry participants with greater insight and context for industry statistics and performance.  

 Highlights include:

•   When asked to assess their business conditions over the next four months, 16.1% of executives responding say they believe business conditions will improve over the next four months, up from 13.3% in April. 67.7% of respondents believe business conditions will remain the same over the next four months, a decrease from 76.7% the previous month. 16.1% believe business conditions will worsen, an increase from 10% in April.

•   16.1% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 13.3% in April. 77.4% believe demand will “remain the same” during the same four-month time period, a decrease from 83.3% the previous month. 6.5% believe demand will decline, up from 3.3% who believed so in April.

•   12.9% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 6.7% in April. 87.1% of executives indicate they expect the “same” access to capital to fund business, a decrease from 93.3% last month. None expect “less” access to capital, unchanged from last month.

•   When asked, 41.9% of the executives report they expect to hire more employees over the next four months, a decrease from 46.7% in April. 45.2% expect no change in headcount over the next four months, an increase from 40% last month. 12.9% expect to hire fewer employees, down from 13.3% last month.

•   51.6% of the leadership evaluate the current U.S. economy as “excellent,” up from 40% in April. 48.4% of the leadership evaluate the current U.S. economy as “fair,” a decrease from 60% the previous month. None evaluate it as “poor,” unchanged from April.

•   9.7% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 6.7% in April. 77.4% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 73.3% the previous month. 12.9% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 20% in April.

•   In May, 35.5% of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 36.7% last month. 64.5% believe there will be “no change” in business development spending, an increase from 63.3% in April. None believe there will be a decrease in spending, unchanged from last month.

For more information, visit: www.leasefoundation.org