Monthly Confidence Index for equipment finance industry holds firm in October

by Marcy Marro | 18 October 2017 12:00 am

The Equipment Leasing & Finance Foundation[1] (the Foundation) releases the October 2017 Monthly Confidence Index for the Equipment Finance Industry[2] (MCI-EFI) today. 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 63.7 in October, unchanged from the September index.

When asked about the outlook for the future, MCI-EFI survey respondent Harry Kaplun, President, Specialty Finance, Frost Bank, said, “Macroeconomic factors like unemployment, interest rates and corporate profitability continue to be favorable. Regionally, storm problems will cause some business interruption that will be overcome in time. A major future stimulant is tax reform, which is gaining momentum in Congress.”

October 2017 Survey Results:
The overall MCI-EFI is 63.7, unchanged from September. 

• When asked to assess their business conditions over the next four months, 40 percent of executives responding said they believe business conditions will improve over the next four months, an increase from 29 percent in September. 60 percent of respondents believe business conditions will remain the same over the next four months, a decrease from 67.7 percent in September. None believe business conditions will worsen, a decrease from 3.2 percent who believed so the previous month.
• 36.7 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, a decrease from 38.7 percent in September. 60 percent believe demand will “remain the same” during the same four-month time period, down from 61.3 percent the previous month. 3.3 percent believe demand will decline, an increase from none who believed so in September.
• 20 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 9.7 percent in September. 80 percent of executives indicate they expect the “same” access to capital to fund business, down from 90.3 percent last month. None expect “less” access to capital, unchanged from last month.
• When asked, 33.3 percent of the executives report they expect to hire more employees over the next four months, a decrease from 38.7 percent in September. 63.3 percent expect no change in headcount over the next four months, an increase from 58.1 percent last month. 3.3 percent expect to hire fewer employees, relatively unchanged from 3.2 percent in September.
• None of the leadership evaluate the current U.S. economy as “excellent,” down from 6.5 percent last month. 100 percent of the leadership evaluate the current U.S. economy as “fair,” an increase from 93.6 percent in September. None evaluate it as “poor,” unchanged from last month.
• 23.3 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 22.6 percent in September. 76.7 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 71 percent the previous month. None believe economic conditions in the U.S. will worsen over the next six months, a decrease from 6.5 percent who believed so in September
• In October, 36.7 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 45.2 percent in September. 63.3 percent believe there will be “no change” in business development spending, an increase from 54.8 percent the previous month. None believe there will be a decrease in spending, unchanged from last month.

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