The Equipment Leasing & Finance Foundation (the Foundation) released the June 2013 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) on June 19. 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 $725 billion equipment finance sector. Overall, confidence in the equipment finance market is 57.3, an increase from the May index of 56.7, reflecting industry participants’ increasing optimism despite continued moderate growth of business investment in equipment.
When asked about the outlook for the future, MCI survey respondent Thomas Jaschik, president, BB&T Equipment Finance, said, “Demand for equipment leases has increased significantly over the last 60 days. Whether this is a seasonal factor or an indicator of an improving economy is subject to debate. If demand continues throughout the summer than perhaps we can give the nod to an improving economy.”
June 2013 Survey Results
The overall MCI-EFI is 57.3, an increase from the May index of 56.7.
• When asked to assess their business conditions over the next four months, 19.4 percent of executives responding said they believe business conditions will improve over the next four months, up from 9.7 percent in May. 71 percent of respondents believe business conditions will remain the same over the next four months, down from 87.1 percent in May. 9.7 percent believe business conditions will worsen, up from 3.2 percent the previous month.
• 19.4 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 12.9 percent in May. 71 percent believe demand will “remain the same” during the same four-month time period, down from 80.6 percent the previous month. 9.7 percent believe demand will decline, up from 6.5 percent in May.
• 19.4 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, down from 25.8 percent in May. 80.6 percent of survey respondents indicate they expect the “same” access to capital to fund business, an increase from 74.2 percent the previous month. No one expects “less” access to capital, unchanged from May.
• When asked, 29 percent of the executives reported they expect to hire more employees over the next four months, an increase from 19.4 percent in May. 67.7 percent expect no change in headcount over the next four months, down from 71 percent last month. 3.2 percent expect fewer employees, down from 9.7 percent of respondents who expected fewer employees in May.
• 90.3 percent of the leadership evaluates the current U.S. economy as “fair,” unchanged from last month. 9.7 percent rate it as “poor,” also unchanged from May.
• 22.6 percent of survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 32.3 percent in May. 71 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 64.5 percent in May. 6.5 percent believe economic conditions in the U.S. will worsen over the next six months, an increase from 3.2 percent who believed so last month.
• In June, 25.8 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, unchanged from May. 74.2 percent believe there will be “no change” in business development spending, and no one believes there will be a decrease in spending, both also unchanged from May.