Equipment finance industry confidence steady in June
Overall, confidence in the equipment finance market is 50.2, steady with the May index of 50.7.
The Equipment Leasing & Finance Foundation released the June 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. 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 David Normandin, president and chief executive officer, Wintrust Specialty Finance, said, “The stress the industry is experiencing in small-business lending continues with elevated bankruptcy, delinquency and a softening of credit quality. It is important to remember during these times that well-positioned businesses actually grow, take share of wallet and expand. Our industry is well-positioned to help continue the success of these businesses, as well as help those struggling through a rough time in the economy. I am optimistic that in a couple of years we will look back and recognize the positive impact we were able to have on the economy and the small business community.”
June 2024 survey results
The overall MCI-EFI is 50.2, steady with the May index of 50.7.
- When asked to assess their business conditions over the next four months, 11.5 percent of the executives responding said they believe business conditions will improve over the next four months, relatively unchanged from 11.1 percent in May while 76.9 percent believe business conditions will remain the same over the next four months, down from 77.8 percent the previous month. Only 11.5 percent believe business conditions will worsen, also relatively unchanged from May.
- Only 7.4 percent of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 11.1 percent in May and 77.8 percent believe demand will remain the same during the same four-month time period, down from 81.5 percent the previous month. Only 14.8 percent believe demand will decline, an increase from 7.4 percent in May.
- Just 19.2 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 14.8 percent in May and 73.1 percent of executives indicate they expect the same access to capital to fund business, down from 77.8 percent last month. Just 7.7 percent expect less access to capital, relatively unchanged from the previous month.
- When asked, 25.9 percent of the executives report they expect to hire more employees over the next four months, an increase from 22.2 percent in May. 66.6 percent expect no change in headcount over the next four months, down from 74.1 percent last month. Finally, 7.4 percent expect to hire fewer employees, up from 3.7 percent in May.
- A scant 3.9 percent of the leadership evaluate the current U.S. economy as excellent, up from none the previous month while 76.9 percent of the leadership evaluate the current U.S. economy as fair, down from 85.2 percent in May. Lastly, 19.2 percent evaluate it as poor, up from 14.8 percent last month.
- Only 14.8 percent of the survey respondents believe that U.S. economic conditions will get better over the next six months, up from 7.4 percent in May; 48.2 percent indicate they believe the U.S. economy will stay the same over the next six months, a decrease from 63 percent last month. Just over a third (37 percent) believe economic conditions in the U.S. will worsen over the next six months, an increase from 29.6 percent the previous month.
- In June, 14.8 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 11.1 percent the previous month and 77.8 percent believe there will be no change in business development spending, down from 81.5 percent in May; 7.4 percent believe there will be a decrease in spending, unchanged from last month.
June 2024 MCI-EFI survey comments from industry executive leadership
Bank, Small Ticket
“I’m a believer that we can control our own optimism by recognizing where opportunities lie, asking what customers want, and then creating a realistic plan and executing it with a frequent follow-up process.” -- Donna Yanuzzi, executive vice president, 1st Equipment Finance, Inc. (FNCB Bank)
Independent, Large Ticket
“Optimism is based on business initiatives to invest in new technologies and applications, but I believe, at a macro level, the headwinds are stronger than the tailwinds at the moment.” -- Jonathan Albin, chief operating officer, Nexseer Capital
“The continuation of supply chain issues has led to further delay of new equipment deliveries, putting additional pressure on supply of equipment in our verticals relative to market demand.” Glenn Davis, CEO, RESIDCO
How may I access the MCI-EFI?
Survey results are posted on the Foundation website, https://www.leasefoundation.org/industry-resources/monthly-confidence-index/. Details about the MCI, including who participates, how it’s designed, and the survey respondent demographics are also available at this link.
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