Equipment Leasing and Finance Industry Confidence Remains Steady in July

WASHINGTON, D.C. — The Equipment Leasing & Finance Foundation releases the July 2014 Monthly Confidence Index for the Equipment Finance Industry. 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 61.4, unchanged from the June MCI-EFI.  

When asked about the outlook for the future, MCI-EFI survey respondent Adam D. Warner, president, key equipment finance and chairman of the Equipment Leasing and Finance Association, said, “I don’t believe that the dramatic contraction of the U.S. economy in Q1 should be blamed on winter weather. There are underlying concerns by businesses and consumers that real unemployment has been too high for too long and not enough of the federal incentives are around job creation. Additionally, the federal government’s inability to collaborate on growth initiatives is having a lasting toll on confidence.”

July 2014 Survey Results:
The overall MCI-EFI is 61.4, unchanged from the June index.

• When asked to assess their business conditions over the next four months, 28.6 percent of executives responding said they believe business conditions will improve over the next four months, up from 23.5 percent in June. 68.6 percent of respondents believe business conditions will remain the same over the next four months, down from 70.6 percent in June. 2.9 percent believe business conditions will worsen, down from 5.9 percent who believed so the previous month.
• 25.7 percent of survey respondents believe demand for leases and loans to fund capital expenditures will increase over the next four months, up from 17.6 percent in June. 68.6 percent believe demand will “remain the same” during the same four-month time period, down from 79.4 percent the previous month. 5.7 percent believe demand will decline, up from 2.9 percent who believed so in June.
• 25.7 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, down from 26.5 percent in June. 74.3 percent of survey respondents indicate they expect the “same” access to capital to fund business, an increase from 73.5 percent in June. No one expects “less” access to capital, unchanged from the previous month.
• When asked, 37 percent of the executives reported they expect to hire more employees over the next four months, a decrease from 44 percent in June. 60 percent expect no change in headcount over the next four months, up from 50 percent last month. 2.9 percent expect fewer employees, down from 5.9 percent who expected fewer employees in June.
• 5.7 percent of the leadership evaluates the current U.S. economy as “excellent,” up from 2.9 percent last month. 88.6 percent of the leadership evaluates the current U.S. economy as “fair,” a decrease from 91.4 percent in June. 5.7 percent rate it as “poor,” unchanged from the last three months.
• 22.9 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 29.4 percent who believed so in June. 74.3 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 70.6 percent in June. 2.9 percent believe economic conditions in the U.S. will worsen over the next six months, up from none last month.
• In July, 25.7 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 35.3 percent in June. 74.3 percent believe there will be “no change” in business development spending, an increase from 61.8 percent last month. None believe there will be a decrease in spending, a decrease from 2.9 percent who believed so last month.