The Equipment Leasing & Finance Foundation has released the September 2012 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. 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 $628 billion equipment finance sector. Overall, confidence in the equipment finance market is 53.0, up from the August index of 50.2, reflecting increased optimism despite concerns over companies’ willingness to expand their businesses in the face of economic and political uncertainty.
When asked about the outlook for the future, MCI survey respondent Anthony Cracchiolo, President and Chief Executive Officer, Vendor Services, U.S. Bank Equipment Finance, said, “The industry is performing well and new businesses are entering the segment to join the positive experience our asset class enjoys. However, the growth of our industry is tightly aligned with the overall U.S. economy and our industry's future will be determined by the broader actions of the U.S. economy.”
When asked to assess their business conditions over the next four months, 8.8% of executives responding said they believe business conditions will improve over the next four months, up from 6.3% in August. 73.5% of respondents believe business conditions will remain the same over the next four months, down from 78.1% in August. 17.6% believe business conditions will worsen, up from 15.6% the previous month.
The majority of respondents (76.5%) evaluates the current U.S. economy as “fair,” up from 68.8% last month. 23.5% rate it as “poor,” down from 31.3% in August. Only 5.9% of survey respondents believe that U.S. economic conditions will get “better” over the next six months, down from 6.3% in August. Overall, 79.4% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, up from 78.1% in August, while 14.7% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 15.6% who believed so last month.
In September, 29.4% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 15.6% in August. 70.6% believe there will be “no change” in business development spending, down from 81.3% last month, and no one believes there will be a decrease in spending, down from 3.1% last month.
When asked, 29.4% of the executives reported they expect to hire more employees over the next four months, down from 31.3% in August. 67.6% expect no change in headcount over the next four months, up from 65.6% last month. 2.9% expect fewer employees, down from 3.1% of respondents who expected fewer employees in August.
Regarding demand for leases and loans to fund capital expenditures (capex), 11.8% of survey respondents believe it will increase over the next four months, an increase from 6.3% in August. 76.5% believe demand will “remain the same” during the same four-month time period, up from 75% the previous month. 11.8% believe demand will decline, down from 18.8% in August.
Executives (14.7%) expect more access to capital to fund equipment acquisitions over the next four months, down from 15.6% in August. 85.3% of survey respondents indicate they expect the “same” access to capital to fund business, an increase from 84.4% the previous month. No survey respondents expect “less” access to capital, unchanged from August.
Survey results are posted on the Foundation website, http://www.leasefoundation.org/IndRsrcs/MCI/, included in the Foundation Forecast newsletter and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.
The Equipment Leasing & Finance Foundation- www.LeaseFoundation.org
