The Equipment Leasing & Finance Foundation (the Foundation) released the January 2015 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) Jan. 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 $903 billion equipment finance sector. Overall, confidence in the equipment finance market is 66.1, an increase from the December index of 63.4 and the highest level in the last three years.
When asked about the outlook for the future, MCI-EFI survey respondent Thomas Jaschik, President, BB&T Equipment Finance, said, “With third quarter GDP in excess of 5 percent, the economy is primed for a surge in capital equipment spending. I believe domestic companies now have the confidence to make substantial investments in plant and equipment to facilitate growth. This could lead to a record year for equipment finance in 2015.”
January 2015 Survey Results
The overall MCI-EFI is 66.1, an increase from the December index of 63.4.
• When asked to assess their business conditions over the next four months, 23.3 percent of executives responding said they believe business conditions will improve over the next four months, down from 28 percent in December. 76.7 percent of respondents believe business conditions will remain the same over the next four months, up from 72 percent in December. None believe business conditions will worsen, unchanged from 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, down from 22 percent in December. 80 percent believe demand will “remain the same” during the same four-month time period, up from 72 percent the previous month. None believe demand will decline, down from 6.3 percent in December.
• 33.3 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 22 percent in December. 66.7 percent of survey respondents indicate they expect the “same” access to capital to fund business, down from 78 percent in December. None expect “less” access to capital, unchanged from the previous month.
• When asked, 50 percent of the executives reported they expect to hire more employees over the next four months, an increase from 43.8 percent in December. 50 percent expect no change in headcount over the next four months, unchanged from last month. None expect fewer employees, down from 6.3 percent in December.
• 3 percent of the leadership evaluate the current U.S. economy as “excellent,” unchanged from last month. 97 percent of the leadership evaluate the current U.S. economy as “fair,” and none rate it as “poor,” both also unchanged from December.
• 43.3 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 47 percent who believed so in December. 56.7 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, up from 53 percent in December. None believe economic conditions in the U.S. will worsen over the next six months, unchanged from last month.
• In January, 50 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 37.5 percent in December. 50 percent believe there will be “no change” in business development spending, a decrease from 62.5 percent last month. None believe there will be a decrease in spending, unchanged from last month.