Equipment finance industry confidence steady in September
Overall, confidence in the equipment finance market is 50.3, steady with the August index of 50.4.
The Equipment Leasing & Finance Foundation released the September 2023 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). 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 Jonathan Albin, chief operating officer, Nexseer Capital, said, “Overall, there appears to be good momentum around capital investment, whether driven by infrastructure initiatives, emerging technologies or onshoring. Barring the emergence of a severe economic threat, I believe this momentum will continue.”
September 2023 survey results
The overall MCI-EFI is 50.3, steady with the August index of 50.4.
- When asked to assess their business conditions over the next four months, 10.3 percent of the executives responding said they believe business conditions will improve over the next four months, an increase from 3.6 percent in August. 75.9 percent believe business conditions will remain the same over the next four months, down from 89.3 percent the previous month. 13.8 percent believe business conditions will worsen, an increase from 7.1 percent in August.
- Just 10.3 percent of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, relatively unchanged from 10.7 percent in August; 79.3 percent believe demand will remain the same during the same four-month time period, an increase from 78.6 percent the previous month and 10.3 percent believe demand will decline, also relatively unchanged from 10.7 percent in August.
- Only 13.8 percent of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 7.1 percent in August and 72.4 percent of executives indicate they expect the same access to capital to fund business, down from 78.6 percent last month. Only 13.8 percent expect less access to capital, down from 14.3 percent the previous month.
- When asked, 20.7 percent of the executives report they expect to hire more employees over the next four months, a decrease from 22.2 percent in August and 72.4 percent expect no change in headcount over the next four months, up from 70.4 percent last month. Only 6.9 percent expect to hire fewer employees, down from 7.4 percent in August.
- None of the leadership evaluate the current U.S. economy as excellent, down from 3.6 percent the previous month. The majority, 89.7 percent of the leadership, evaluate the current U.S. economy as fair, up from 85.7 percent in August. Only 10.3 percent evaluate it as poor, relatively unchanged from 10.7 percent last month.
- Only 6.9 percent of the survey respondents believe that U.S. economic conditions will get better over the next six months, a decrease from 10.7 percent in August, while 62.1 percent indicate they believe the U.S. economy will stay the same over the next six months, an increase from 60.7 percent last month. Nearly a third (31 percent) believe economic conditions in the U.S. will worsen over the next six months, an increase from 28.6 percent the previous month.
- In September, 24.1 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 25 percent the previous month and 69 percent believe there will be no change in business development spending, up from 67.9 percent in August. Only 6.9 percent believe there will be a decrease in spending, relatively unchanged from 7.1 percent last month.
September 2023 MCI-EFI survey comment from industry executive leadership
Bank, Small Ticket
“Interest rates have hopefully stabilized. Demand should increase to account for year-end spending.”-- Charles Jones, senior vice president, 1st Equipment Finance (FNCB Bank)
Independent, Small Ticket
“Inflation and the economy will improve when we return to energy independence.” -- James D. Jenks, CEO, Global Finance and Leasing Services, LLC
Survey results are posted on the Foundation website, https://www.leasefoundation.org/industry-resources/monthly-confidence-index/,
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