The industry continues to be stable and positioned for growth as the U.S. economy improves.
The Equipment Leasing & Finance Foundation (the Foundation) released the July 2016 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 $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 52.5, remaining steady with the June index of 52.3.
When asked about the outlook for the future, MCI-EFI survey respondent Anthony Cracchiolo, president and CEO, U.S. Bank Equipment Finance, said, “The industry continues to be stable and positioned for growth as the U.S. economy improves. However, challenges remain as the expansion remains slow and as low interest rates continue to apply pressure to the industry's bottom line.”
July 2016 Survey Results
The overall MCI-EFI is 52.5, steady with the June index of 52.3.
• When asked to assess their business conditions over the next four months, 12.1 percent of executives responding said they believe business conditions will improve over the next four months, an increase from 9.4 percent in June. 75.8 percent of respondents believe business conditions will remain the same over the next four months, an increase from 68.8 percent in June. 12.1 percent believe business conditions will worsen, a decrease from 21.9 percent the previous month.
• 12.1 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 6.3 percent in June. 57.6 percent believe demand will “remain the same” during the same four-month time period, down from 71.9 percent the previous month. 30.3 percent believe demand will decline, an increase from 21.9 percent who believed so in June.
• 15.2 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, relatively unchanged from 15.6 percent in June. 78.8 percent of survey respondents indicate they expect the “same” access to capital to fund business, a decrease from 81.3 percent the previous month. 6.1 percent expect “less” access to capital, an increase from 3.1 percent last month.
• When asked, 30.3 percent of the executives report they expect to hire more employees over the next four months, a decrease from 37.5 percent in June. 63.6 percent expect no change in headcount over the next four months, an increase from 56.3 percent last month. 6.1 percent expect to hire fewer employees, unchanged from June.
• None of the leadership evaluates the current U.S. economy as “excellent,” unchanged from last month. 100.0 percent of the leadership evaluate the current U.S. economy as “fair,” an increase from 96.9 percent last month. None evaluates it as “poor,” a decrease from 3.1 percent in June.
• 3.0 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 6.5 percent in June. 78.8 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 75.0 percent the previous month. 18.2 percent believe economic conditions in the U.S. will worsen over the next six months, a slight decrease from 18.8 percent who believed so last month.
• In July, 36.4 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 31.3 percent in June. 60.6 percent believe there will be “no change” in business development spending, a decrease from 68.8 percent the previous month. 3.0 percent believe there will be a decrease in spending, an increase from none who believed so last month.
For more information, visit http://www.LeaseFoundation.org.
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