The Equipment Leasing & Finance Foundation (the Foundation) released the February 2013 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) Feb. 22. 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 up for the third consecutive month at 58.7, an increase from the January index of 54.2, reflecting industry participants’ increasing optimism despite a wary eye on economic conditions and government management of fiscal policies.
When asked about the outlook for the future, MCI survey respondent Anthony Cracchiolo, president and chief executive officer, Vendor Services, U.S. Bank EquipmentFinance, said, “The industry continues to look stable and positioned on solid footing for future growth. The replacement economy is well under way. However, expansion of the markets is still questionable. The next several months will tell the story for 2013 and answer the question of whether 2013 will see moderate or significant growth. In either case, the equipment finance industry will be on the leading edge of the overall economy.”
February 2013 Survey Results:
The overall MCI-EFI is 58.7, up from the January index of 54.2.
• When asked to assess their business conditions over the next four months, 20 percent of executives responding said they believe business conditions will improve over the next four months, up from 6.1 percent in January. 77.1 percent of respondents believe business conditions will remain the same over the next four months, down from 87.9 percent in January. 2.9 percent believe business conditions will worsen, down from 6.1 percent the previous month.
• 20 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 12.1 percent in January. 77.1 percent believe demand will “remain the same” during the same four-month time period, up from 75.8 percent the previous month. 2.9 percent believe demand will decline, down from 12.1 percent in January.
• 22.9 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 18.2 percent in January. 77.1 percent of survey respondents indicate they expect the “same” access to capital to fund business, a decrease from 85.3 percent the previous month. No one expects “less” access to capital, unchanged from January.
• When asked, 22.9 percent of the executives reported they expect to hire more employees over the next four months, down from 24.2 percent in January. 65.7 percent expect no change in headcount over the next four months, down from 69.7 percent last month. 11.4 percent expect fewer employees, up from 6.1 percent of respondents who expected fewer employees in January.
• 85.7 percent of the leadership evaluates the current U.S. economy as “fair,” down from 87.9 percent last month. 11.4 percent rate it as “poor,” down from 12.1 percent in January. One survey respondent rated the current economy as “excellent.”
• 22.9 percent of survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 6.1 percent in January. 74.3 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, down from 84.8 percent in January. 2.9 percent believe economic conditions in the U.S. will worsen over the next six months, a decrease from 9.1 percent who believed so last month.
• In February, 37.1 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 30.3 percent in January. 60 percent believe there will be “no change” in business development spending, down from 69.7 percent last month. 2.9 percent believe there will be a decrease in spending, up from no one who believed so last month.
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