Equipment Leasing and Finance Association’s survey of economic activity: December leasing and finance index
December new business volume up two percent year-over-year, 51 percent month-to-month, 3.9 percent at year-end.
The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity from 25 companies representing a cross section of the $1 trillion equipment finance sector, showed their overall new business volume for December was $12.5 billion, up two percent year-over-year from new business volume in December 2022. Volume was up 51 percent from $8.3 billion in November in a typical end-of-quarter, end-of-year spike. Cumulative new business volume for 2023 was up 3.9 percent compared to 2022.
Receivables over 30 days were 2.3 percent, up from 2.0 percent the previous month and up from 1.8 percent in the same period in 2022. Charge-offs were 0.4 percent, unchanged from the previous month and up from 0.3 percent in the year-earlier period.
Credit approvals totaled 75 percent, down from 76 percent in November. Total headcount for equipment finance companies was up 1.2 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in January is 48.6, an increase from the December index of 42.5.
“The MLFI closes out 2023 with a strong finish despite ongoing concerns of a recession and the higher interest rate environment throughout the year. Positive year-end new business volume shows that U.S. businesses continue to rely on equipment financing to operate and grow. Delinquencies and losses, while historically elevated, have remained within consistent ranges since last summer. These metrics, combined with improved industry confidence, bode well for an optimistic start to 2024,” says Leigh Lytle, ELFA president and CEO.
“DLL finished the year strong with a good December as new applications were up, both in dollar amount and overall count. This contributed to DLL closing out 2023 above plan. Based on the positive closing of 2023, I believe the industry can move into 2024 with confidence. Activity across industry verticals is robust with expectations that tech device sales and, by extension, leasing volumes will recover in 2024. I also anticipate a focus on retail finance programs from hard asset manufacturers, pulling inventory from their dealer channels,” says Neal Garnett, chief commercial officer and member of the executive board at DLL.
About ELFA’s MLFI-25
The MLFI-25 is the only near-real-time index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is released globally at 8 a.m. Eastern time from Washington, D.C., each month on the day before the U.S. Department of Commerce releases the durable goods report. The MLFI-25 is a financial indicator that complements the durable goods report and other economic indexes, including the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete view of the status of productive assets in the U.S. economy: equipment produced, acquired and financed.
The MLFI-25 is a time series that reflects two years of business activity for the 25 companies currently participating in the survey. The latest MLFI-25, including methodology and participants, is available at www.elfaonline.org/knowledge-hub/mlfi-25-monthly-leasing-and-finance-index.
PRO CONTRACTOR RENTALS MAGAZINE
Pro Contractor Rentals provides information of value to rental centers who focus time, resources and attention on meeting the demands of construction contractors and other equipment rental customers.
