The Equipment Leasing & Finance Foundation (the Foundation) released the March 2014 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 $827 billion equipment finance sector. Overall, confidence in the equipment finance market is 65.1, the highest index in two years and an increase from the February index of 63.3. The first quarter MCI levels are the three highest since April 2011.
When asked about the outlook for the future, MCI survey respondent Daryn Lecy, VP of operations, Stearns Bank N.A. Equipment Finance Division, said, “Considering we are coming off what are typically slower months and the likelihood that our extra-aggressive winter further impacted new business, we remain optimistic for 2014. We are fortunate to be experiencing year-over-year growth, increasing demand, and overall solid delinquency levels.”
March 2014 Survey Results
The overall MCI-EFI is 65.1, an increase from the February index of 63.3.
• When asked to assess their business conditions over the next four months, 31.4 percent of executives responding said they believe business conditions will improve over the next four months, up from 21.2 percent in February. 65.7 percent of respondents believe business conditions will remain the same over the next four months, down from 72.7 percent in February. 2.9 percent believe business conditions will worsen, down from 6.1 percent who believed so the previous month.
• 31.4 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 24.2 percent in February. 62.9 percent believe demand will “remain the same” during the same four-month time period, down from 69.7 percent the previous month. 5.7 percent believe demand will decline, down from 6.1 percent who believed so in February.
• 31.4 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, unchanged from February. 68.6 percent of survey respondents indicate they expect the “same” access to capital to fund business, up from 65.5 percent in February. No one expects “less” access to capital, down from 3.1 percent who expected less access the previous month.
• When asked, 40 percent of the executives reported they expect to hire more employees over the next four months, relatively unchanged from February. 60 percent expect no change in headcount over the next four months, up from 53 percent last month. No one expects fewer employees, down from 6.3 percent who expected fewer employees in February.
• 5.7 percent of the leadership evaluates the current U.S. economy as “excellent,” up from 3 percent last month. 88.6 percent of the leadership evaluates the current U.S. economy as “fair,” down from 93.8 percent last month. 5.7 percent rate it as “poor,” up from 3 percent last month.
• 31.4 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 34.4 percent who believed so in February. 68.6 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 59.4 percent in February. No one believes economic conditions in the U.S. will worsen over the next six months, a decrease from 6.2 percent last month.
• In March, 45.7 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 56.3 percent in February. 54.3 percent believe there will be “no change” in business development spending, an increase from 43.8 percent last month. No one believes there will be a decrease in spending, unchanged from last month.
For more information, visit www.LeaseFoundation.org.