Equipment Leasing and Finance Association’s Survey of Economic Activity: Monthly Leasing and Finance Index
April new business volume down 8 percent year-over-year, down 7 percent month-to-month and up 0.7 percent year-to-date.
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 April was $9.7 billion, down 8 percent year-over-year from new business volume in April 2022. Volume was down 7 percent from $10.4 billion in March. Year-to-date, cumulative new business volume was up 0.7 percent compared to 2022.
Receivables over 30 days were 1.8 percent, down from 1.9 percent the previous month and down from 2.1 percent in the same period in 2022. Charge-offs were 0.33 percent, up from 0.32 percent the previous month and up from 0.05 percent in the year-earlier period.
Credit approvals totaled 77.3 percent, up from 75.3 percent in March. Total headcount for equipment finance companies was down 1.8 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in May is 40.6, a decrease from the April index of 47.0.
Commentary
“April data revealed some softness in new business volume reported by MLFI respondents. It is not clear whether increased borrowing rates are constraining liquidity or if this decrease in originations is merely a blip in an otherwise healthy marketplace. Separately, a Foundation survey indicates that a growing segment of business heads is somewhat pessimistic about the short-term outlook for the economy, in general, and the equipment finance industry, specifically. We will be monitoring these and other economic data closely to provide useful insights to ELFA members as they navigate a choppy economy,” says Ralph Petta, ELFA president and CEO.
“We all continue to navigate the ebbs and flows of a challenging economy. While that impact has been felt across all industries with unique circumstances, collectively, equipment finance appears to be well positioned. Companies and consumers remain resilient and are more mindful of the role financing plays as part of strategic long-term capital decisions. We’re coming from a period where access to capital was high, and the cost was the lowest we’ve seen in decades. Now, we’re seeing more thoughtful conversations and informed decisions—heightening the importance of relationships and experienced people to help navigate it all,” says Jeffrey LaLima, president, Financial Partners Group.
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.
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