ELFA Confidence in February Remains at Three-Year High

WASHINGTON, D.C. — The Equipment Leasing & Finance Foundation recently released the February 2015 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 $903-billion equipment finance sector. Overall, confidence in the equipment finance market is 66.3, a slight increase from the three-year high level reached by the January index of 66.1.

When asked about the outlook for the future, MCI-EFI survey respondent William Verhelle, CEO, First American Equipment Finance, a City National Bank Company, said, “The economy continues to improve. First American is seeing increased equipment acquisition activity among the large corporate borrowers we serve. We are optimistic that lower energy costs, if they remain at current low levels, will drive increased U.S. economic activity in the second half of 2015. We are more optimistic about the U.S. economy today than we have been at any time during the past six years.”

February 2015 Survey Results:
The overall MCI-EFI is 66.3, a slight increase from the January index of 66.1.

• When asked to assess their business conditions over the next four months, 30.3 percent of executives responding said they believe business conditions will improve over the next four months, up from 23.3 percent in January. 63.6 percent of respondents believe business conditions will remain the same over the next four months, down from 76.7 percent in January. 6.1 percent believe business conditions will worsen, up from none who believed so the previous month.
• 42.4 percent of survey respondents believe demand for leases and loans to fund capital expenditures will increase over the next four months, up from 20 percent in January. 51.5 percent believe demand will “remain the same” during the same four-month time period, down from 80 percent the previous month. 6.1 percent believe demand will decline, up from none in January.
• 27.3 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, down from 33.3 percent in January. 72.7 percent of survey respondents indicate they expect the “same” access to capital to fund business, up from 66.7 percent in January. None expect “less” access to capital, unchanged from the previous month.
• When asked, 39.4 percent of the executives reported they expect to hire more employees over the next four months, a decrease from 50 percent in January. 57.6 percent expect no change in headcount over the next four months, up from 50 percent last month. 3 percent expect to hire fewer employees, up from none who expected fewer in January.
• 6.1 percent of the leadership evaluate the current U.S. economy as “excellent,” up from 3 percent last month. 90.9 percent of the leadership evaluate the current U.S. economy as “fair,” down from 97 percent in January. 3 percent rate it as “poor,” up from none the previous month.
• 45.4 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 43.3 percent who believed so in January. 54.6 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, down from 56.7 percent in January. None believe economic conditions in the U.S. will worsen over the next six months, unchanged from last month.
• In February, 48.5 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 50 percent in January. 51.5 percent believe there will be “no change” in business development spending, an increase from 50 percent last month. None believe there will be a decrease in spending, unchanged from last month.