Equipment Leasing and Finance Association’s survey of economic activity: Monthly leasing and finance index
June new business volume up 6 percent year-over-year, 15 percent month-to-month and 1.9 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 June was $10.9 billion, up 6 percent year-over-year from new business volume in June 2022. Volume was up 15 percent from $9.5 billion in May. Year-to-date, cumulative new business volume was up 1.9 percent compared to 2022.
Receivables over 30 days were 1.8 percent, down from 2.0 percent the previous month and up from 1.5 percent in the same period in 2022. Charge-offs were 0.37 percent, up from 0.33 percent the previous month and up from 0.15 percent in the year-earlier period.
Credit approvals totaled 76.1 percent, down from 76.4 percent in May. Total headcount for equipment finance companies was down 1.5 percent year-over-year.
Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) in July is 46.4, an increase from the June index of 44.1.
“The second quarter concludes on an optimistic note, as MLFI respondents reported strong business performance coupled with a positive outlook for the short-term future of the industry. As inflation continues to decelerate and the Fed appears to be on the verge of achieving an economic soft landing, the equipment finance market enters the second half of the year in fine shape,” says Ralph Petta, ELFA president and CEO.
“The equipment finance industry has remained resilient through one of the most turbulent periods in recent economic history,” says Anthony Sasso, head of TD Equipment Finance (TDEF). “Despite economic headwinds, like high interest rates, the equipment finance sector continues to see opportunities for growth and innovation. In fact, the year-over-year increase on overall new business volume reflected in the ELFA data is consistent with our experience here at TDEF, as customers across many sectors continue to look for financing solutions to help them acquire equipment in order to keep up with demand.”
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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