Equipment Leasing and Finance Industry Confidence Improves in May

July 2019

The Equipment Leasing & Finance Foundation releases the May 2019 Monthly Confidence Index for the Equipment Finance Industry May 16. 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 improved in May to 59.2, up from the April index of 58.3.
    
This month marks the 10th anniversary of the MCI-EFI, which was launched in the wake of the 2008 recession to provide industry participants with greater insight and context for industry statistics and performance.
    
When asked about the outlook for the future, MCI-EFI survey respondent Michael DiCecco, executive managing director, Huntington Asset Finance, said, “Our customers continue to be generally positive, delivering solid business performance and investing in equipment. Should that sentiment continue, I believe the equipment finance industry will have another good year.”
    
May 2019 Survey Results include the following:

The overall MCI-EFI is 59.2, an increase from 58.3 in April.
    
When asked to assess their business conditions over the next four months, 16.1 percent of executives responding said they believe business conditions will improve over the next four months, up from 13.3 percent in April. Business conditions will remain the same over the next four months according to 67.7 percent of respondents, a decrease from 76.7 percent the previous month. And 16.1 percent believe business conditions will worsen, an increase from 10 percent in April.
    
Demand for leases and loans to fund capital expenditures (capex) will increase over the next four months according to 16.1 percent of survey respondents, an increase from 13.3 percent in April. Demand will remain the same during the same period according to 77.4 percent, a decrease from 83.3 percent the previous month. And 6.5 percent believe demand will decline, up from 3.3 percent who believed so in April.
    
Of those responding, 12.9 percent expect more access to capital to fund equipment acquisitions over the next four months, up from 6.7 percent in April. 87.1 percent of executives indicate they expect the “same” access to capital to fund business, a decrease from 93.3 percent last month. None expect “less” access to capital, unchanged from last month.
    
When asked, 41.9 percent of the executives report they expect to hire more employees over the next four months, a decrease from 46.7 percent in April. 45.2 percent expect no change in headcount over the next four months, an increase from 40 percent last month. 12.9 percent expect to hire fewer employees, down from 13.3 percent last month.
    
The current U.S. economy was rated as “excellent” by 51.6 percent of the leadership, up from 40 percent in April; 48.4 percent of the leadership evaluate the current U.S. economy as “fair,” a decrease from 60 percent the previous month. None evaluate it as “poor,” which is unchanged from April.
    
Of those responding, 9.7 percent believe that U.S. economic conditions will get “better” over the next six months, up from 6.7 percent in April; 77.4 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 73.3 percent the previous month; 12.9 percent believe economic conditions in the United States will worsen over the next six months, a decrease from 20 percent in April.
    
In May, 35.5 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 36.7 percent last month. 64.5 percent believe there will be “no change” in business development spending, an increase from 63.3 percent in April. None believe there will be a decrease in spending, unchanged from the previous month.