The Equipment Leasing & Finance Foundation (the Foundation) released the May 2015 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 $903 billion equipment finance sector. Overall, confidence in the equipment finance market is 67.5, slightly lower than the April index of 70.7.
When asked about the outlook for the future, MCI-EFI survey respondent Valerie Hayes Jester, president, Brandywine Capital Associates Inc., said, “We are experiencing strong application volume, which we attribute to more of our customers deciding to move forward with projects that have been ’on hold.’ Competition is brisk in the marketplace, but equipment financing seems to be the preferred method of acquisition in this quarter.”
May 2015 Survey Results:
The overall MCI-EFI is 67.5, slightly lower than the April index of 70.7.
• When asked to assess their business conditions over the next four months, 30.8 percent of executives responding said they believe business conditions will improve over the next four months, down from 44.4 percent in April. 69.2 percent of respondents believe business conditions will remain the same over the next four months, up from 55.6 percent in April. None believe business conditions will worsen, unchanged from the previous month.
• 34.6 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 48.2 percent in April. 65.4 percent believe demand will “remain the same” during the same four-month time period, up from 51.9 percent the previous month. None believe demand will decline, unchanged from April.
• 38.5 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 25.9 percent in April. 57.7 percent of survey respondents indicate they expect the “same” access to capital to fund business, down from 74.1 percent in April. 3.9 percent expect “less” access to capital, up from none who expected less access to capital the previous month.
• When asked, 53.9 percent of the executives reported they expect to hire more employees over the next four months, an increase from 51.9 percent in April. 42.3 percent expect no change in headcount over the next four months, down from 48.2 percent last month. 3.9 percent expect to hire fewer employees, up from none who expected fewer in April.
• 3.9 percent of the leadership evaluate the current U.S. economy as “excellent,” down from 7.4 percent last month. 96.2 percent of the leadership evaluate the current U.S. economy as “fair,” up from 92.6 percent in April. None rate it as “poor,” unchanged from the previous month.
• 34.6 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 40.7 percent who believed so in April. 65.4 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 55.6 percent in April. None believe economic conditions in the U.S. will worsen over the next six months, a decrease from 3.7 percent who believed so last month.
• In May, 50 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 59.3 percent in April. 46.2 percent believe there will be “no change” in business development spending, an increase from 40.7 percent last month. 3.9 percent believe there will be a decrease in spending, an increase from none who believed so last month.
For more information, visit www.LeaseFoundation.org.