The Equipment Leasing & Finance Foundation (the Foundation) released the August 2014 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) Aug. 21. 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 $827 billion equipment finance sector. Overall, confidence in the equipment finance market is 58.9, easing from the previous two months’ indexes of 61.4.
When asked about the outlook for the future, MCI-EFI survey respondent Thomas Jaschik, president, BB&T Equipment Finance, said, “The next two months will be very interesting for the equipment finance industry. Will the economy accelerate, as many economists have predicted? Will U.S. business feel confident in making capital investments? Or, will the economy continue its lackluster recovery? The next 60 days should tell whether this will be a year of exceptional or limited growth for our industry.”
August 2014 Survey Results:
The overall MCI-EFI is 58.9, easing from 61.4 the previous two months.
• When asked to assess their business conditions over the next four months, 18.2 percent of executives responding said they believe business conditions will improve over the next four months, down from 28.6 percent in July. 78.8 percent of respondents believe business conditions will remain the same over the next four months, up from 68.6 percent in July. 3 percent believe business conditions will worsen, unchanged from the previous month.
• 21.2 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 25.7 percent in July. 75.8 percent believe demand will “remain the same” during the same four-month time period, up from 68.6 percent the previous month. 3 percent believe demand will decline, down from 5.7 percent who believed so in July.
• 15.2 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, down from 25.7 percent in July. 84.8 percent of survey respondents indicate they expect the “same” access to capital to fund business, an increase from 74.3 percent in July. No one expects “less” access to capital, unchanged from the previous month.
• When asked, 33.3 percent of the executives reported they expect to hire more employees over the next four months, a decrease from 37 percent in July. 57.6 percent expect no change in headcount over the next four months, down from 60 percent last month. 9.1 percent expect fewer employees, up from 2.9 percent who expected fewer employees in July.
• 6.1 percent of the leadership evaluates the current U.S. economy as “excellent,” up from 5.7 percent last month. 87.9 percent of the leadership evaluates the current U.S. economy as “fair,” a slight decrease from 88.6 percent in July. 6.1 percent rate it as “poor,” relatively unchanged from the last four months.
• 30.3 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 22.9 percent who believed so in July. 66.7 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 74.3 percent in July. 3 percent believe economic conditions in the U.S. will worsen over the next six months, unchanged from last month.
• In August, 21.2 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 25.7 percent in July. 78.8 percent believe there will be “no change” in business development spending, an increase from 74.3 percent last month. None believe there will be a decrease in spending, unchanged from last month.