ELFA survey of economic activity: Monthly leasing and finance index report
January 2021 new business volume down 12 percent year-over-year.
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 $900 billion equipment finance sector, showed their overall new business volume for January was $8.1 billion, down 12 percent year-over-year from new business volume in January 2020. Volume was down 33 percent month-to-month from $12.1 billion in December following the typical end-of-quarter, end-of-year spike in new business activity.
Receivables more than 30 days were 2.20 percent, unchanged from the previous month and up from 2.00 percent in the same period in 2020. Charge-offs were 0.47 percent, down from 0.59 percent the previous month and unchanged from the year-earlier period.
Credit approvals totaled 76.2 percent, up from 75.2 percent in December. Total headcount for equipment finance companies was down 4.9 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in February is 64.4, an increase from the January index of 59.6.
“New business volume was relatively soft in January, as is typical for early Q1 business activity for many equipment finance companies. Portfolio quality for reporting companies is in the healthy range as well. Preliminary economic projections indicate that equipment finance activity should accelerate as overall conditions in the U.S. economy improve in 2021. Time will tell.” -- Ralph Petta, ELFA president and CEO
“2021 pipelines are steady and competitive. We notice continued demand for replacement capex and are hearing several equipment vendors speak of manufacturing backlogs.” -- Chris Bucher, president, Hancock Whitney Equipment Finance, LLC
About ELFA’s MLFI-25
The MLFI-25 is the only 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/Data/MLFI/.
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