The Equipment Leasing & Finance Foundation has released the March 2012 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). Overall, confidence in the equipment finance market is 61.7, up from the February index of 59.6, indicating industry participants are optimistic despite concerns that external factors, including gas prices and the upcoming elections, may have on the market.
March 2012 Survey Results:
• When asked to assess their business conditions over the next four months, 28.9% of executives responding said they believe business conditions will improve over the next four months, up from 23.5% in February. In addition, 71.1% of respondents believe business conditions will remain the same over the next four months, down from 73.5% in February. No one responded they believe business conditions will worsen, a decrease from 2.9% in February.
• Also, 34.2% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 26.5% in February. Furthermore, 65.8% believe demand will “remain the same” during the same four-month time period, down from 67.6% the previous month. No one responded they believe demand will decline, down from 5.9% who believed so in February.
• The survey found that 21.1% of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 20.6% in February. In addition, 78.9% of survey respondents indicate they expect the “same” access to capital to fund business, a decrease from 79.4% the previous month. No survey respondents expect “less” access to capital, unchanged from February.
• When asked, 28.9% of the executives reported they expect to hire more employees over the next four months, up from 26.5% in February. The survey found that 63.2% expect no change in headcount over the next four months, a decrease from 70.6% last month, while 7.9% expect fewer employees, up from 2.9% in February.
• Furthermore, 89.5% of the leadership evaluates the current U.S. economy as “fair,” down from 91.2% last month. Also, 10.5% rate the U.S. economy as “poor,” up from 8.8% in February.
• The survey found that 31.6% of respondents believe that U.S. economic conditions will get “better” over the next six months, up from 26.5% in February. Also, 63.2% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, down from 70.6% in February. In addition, 5.3% responded that they believe economic conditions in the U.S. will worsen over the next six months, an increase from 2.9% who believed so last month.
• In March, 28.9% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 26.5% in February. Lastly, 71.1% believe there will be “no change” in business development spending, down from 73.5% last month, and no one believes there will be a decrease in spending, unchanged from last month.
When asked about the outlook for the future, MCI survey respondent Valerie Jester, President, Brandywine Capital Associates, Inc., commented, “I still remain optimistic, but it seems that increasing gas prices, looming elections, and lack of comfort with future government regulation have created a rather sluggish first quarter as far as the small business marketplace is concerned. We had hoped to see sustained momentum from strong fourth quarter activity, but it has yet to appear.”
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