Equipment Leasing and Finance Industry Confidence Eases in June

The Equipment Leasing & Finance Foundation released their June 2014 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) reporting 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 61.4, an easing from three consecutive months of two-year high levels, which topped at 65.4.

When asked about the outlook for the future, MCI survey respondent David Schaefer, Chief Executive Officer, Mintaka Financial, LLC, said, “Application volume, approvals and funding are all up and are at record post-recession levels. Portfolio performance in terms of delinquency is still extraordinarily low. We are optimistic about 2014 and expect to exceed our yearly origination goals.”

June 2014 Survey Results: the overall MCI-EFI is 61.4, a decrease from the May index of 65.4.

• When asked to assess their business conditions over the next four months, 23.5 percent of executives responding said they believe business conditions will improve over the next four months, down from 31.4 percent in May. 70.6 percent of respondents believe business conditions will remain the same over the next four months, up from 68.6 percent in May. 5.9 percent believe business conditions will worsen, up from none who believed so the previous month.
• Just over 17 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 34.3 percent in May. 79.4 percent believe demand will “remain the same” during the same four-month time period, up from 65.7 percent the previous month. 2.9 percent believe demand will decline, up from none who believed so in May.
• Over 26 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, down from 28.6 percent in May. 73.5 percent of survey respondents indicate they expect the “same” access to capital to fund business, an increase from 71.4 percent in May. No one expects “less” access to capital, unchanged from the previous month.
• When asked, 44 percent of the executives reported they expect to hire more employees over the next four months, an increase from 40 percent in May. 50 percent expect no change in headcount over the next four months, down slightly from 51.4 percent last month. 5.9 percent expect fewer employees, down from 8.6 percent who expected fewer employees in May.
• Just less than 3 percent of the leadership evaluates the current U.S. economy as “excellent,” 91.4 percent of the leadership evaluates the current U.S. economy as “fair,” and 5.7 percent rate it as “poor,” all unchanged from the last two months.
• Just short of 30 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 37 percent who believed so in May. 70.6 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 62.9 percent in May. None believe economic conditions in the U.S. will worsen over the next six months, unchanged from last month.
• In June, 35.3 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 45.7 percent in May. 61.8 percent believe there will be “no change” in business development spending, an increase from 54.3 percent last month. 2.9 percent believe there will be a decrease in spending, an increase from none who believed so last month. PR