Equipment finance industry confidence eases in March
The Equipment Leasing & Finance Foundation released the March 2023 Monthly Confidence Index for the Equipment Finance Industry. Overall, confidence in the equipment finance market is 50.3, a decrease from the February index of 51.8.
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.
When asked about the outlook for the future, MCI-EFI survey respondent Nancy Pistorio, foundation chair and president, Madison Capital LLC said, “As the pandemic becomes farther in the rear-view mirror, industries affected such as livery, fitness, entertainment and hospitality are now showing strong demand for equipment.”
March 2023 survey results:
The overall MCI-EFI is 50.3, a decrease from the February index of 51.8.
- When asked to assess their business conditions over the next four months, 10.7 percent of the executives responding said they believe business conditions will improve over the next four months, a decrease from 16.1 percent in February. 57.1 percent believe business conditions will remain the same over the next four months, down from 61.3 percent the previous month. 32.1 percent believe business conditions will worsen, an increase from 22.6 percent in February.
- Just 10.7 percent of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 9.7 percent in February; 67.9 percent believe demand will remain the same during the same four-month period, a decrease from 71 percent the previous month. Only 21.4 percent believe demand will decline, up from 19.4 percent in February.
- Only 17.9 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 12.9 percent in February. Moreover, 71.4 percent of executives indicate they expect the same access to capital to fund business, a decrease from 74.2 percent last month. Just 10.7 percent expect less access to capital, down from 12.9 percent the previous month.
- When asked, 35.7 percent of the executives report they expect to hire more employees over the next four months, a decrease from 38.7 percent in February. More than half (57.1 percent) expect no change in headcount over the next four months, an increase from 54.8 percent last month. Only 7.1 percent expect to hire fewer employees, up from 6.5 percent in February.
- Just 3.7 percent of the leadership evaluate the current U.S. economy as excellent, up from none the previous month; 88.9 percent of the leadership evaluate the current U.S. economy as fair, up from 87.1 percent in February. Only 7.4 percent evaluate it as poor, a decrease from 12.9 percent last month.
- Only 3.6 percent of the survey respondents believe that U.S. economic conditions will get better over the next six months, a slight increase from 3.2 percent in February; 53.6 percent indicate they believe the U.S. economy will stay the same over the next six months, a decrease from 54.8 percent last month; and 42.9 percent believe economic conditions in the U.S. will worsen over the next six months, an increase from 41.9 percent the previous month.
- In March, 39.3 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 51.6 percent the previous month; 53.6 percent believe there will be no change in business development spending, up from 41.9 percent in February. Only 7.1 percent believe there will be a decrease in spending, up from 6.5 percent last month.
March 2023 MCI-EFI survey comment from industry executive leadership:
Bank, Small Ticket
“Wintrust is well positioned to grow during this time of uncertainty given our strong balance sheet and commitment to the equipment finance space and our customers.” -- David Normandin, president and CEO, Wintrust Specialty Finance
The complete survey results are posted on the Foundation website,
https://www.leasefoundation.org/industry-resources/monthly-confidence-index/
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