The Equipment Leasing & Finance Foundation (the Foundation) released the December 2016 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 is 67.5, a sharp increase from the November index of 54.6, with equipment finance executives expressing post-election optimism.
When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, managing director, Commercial Finance Group, Hanmi Bank, said, “I am optimistic as the election cycle is finally behind us, and regardless of the side, people will begin to accept it and move forward. I also think an interest rate increase will be healthy, and I believe that we will see that happen this coming year.”
The overall MCI-EFI is 67.5, an increase from the November index of 54.6.
• When asked to assess their business conditions over the next four months, 48.4 percent of executives responding said they believe business conditions will improve over the next four months, an increase from 13.8 percent in November. 45.2 percent of respondents believe business conditions will remain the same over the next four months, a decrease from 69.0 percent in November. 6.5 percent believe business conditions will worsen, a decrease from 17.2 percent the previous month.
• 38.7 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 13.8 percent in November. 54.8 percent believe demand will “remain the same” during the same four-month time period, down from 69.0 percent the previous month. 6.5 percent believe demand will decline, down from 17.2 percent who believed so in November.
• 22.6 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, an increase from 13.8 percent who expected more in November. 77.4 percent of executives indicate they expect the “same” access to capital to fund business, a decrease from 82.8 percent the previous month. None expect “less” access to capital, a decrease from 3.4 percent last month.
• When asked, 41.9 percent of the executives report they expect to hire more employees over the next four months, an increase from 34.5 percent in November. 48.4 percent expect no change in headcount over the next four months, a decrease from 55.2 percent last month. 9.7 percent expect to hire fewer employees, down from 10.3 percent in November.
• None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from last month. 100.0 percent of the leadership evaluate the current U.S. economy as “fair,” and none evaluate it as “poor,” both also unchanged from November.
• 71.0 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 17.2 percent in November. 25.8 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 65.5 percent the previous month. 3.2 percent believe economic conditions in the U.S. will worsen over the next six months, a decrease from 17.2 percent who believed so last month.
• In December, 48.4 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 37.9 percent in November. 51.6 percent believe there will be “no change” in business development spending, a decrease from 58.6 percent the previous month. None believe there will be a decrease in spending, a decrease from 3.4 percent who believed so last month.
For more information, visit www.LeaseFoundation.org.