The Equipment Leasing & Finance Foundation released its October 2011 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), according to the Associated Equipment Distributors. Designed to collect leadership data, the index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $521 billion equipment-finance sector. Overall, confidence in the equipment finance market is 50.7, up from the September index of 47.6, indicating some respite from the concerns about the global economic situation.
When asked about the outlook for the future, survey respondent Valerie Hayes Jester, president, Brandywine Capital Associates Inc., said, “The equipment finance industry has weathered and will continue to weather the storms of this economy and all its uncertainty. Access to capital is strong, but demand continues to be weak for small business customers. I do not see that dynamic changing in the coming year to 18 months.”
The overall MCI-EFI is 50.7, an increase from the September index of 47.6.
- When asked to assess their business conditions over the next four months, 9.8 percent of executives responding said they believe business conditions will improve over the next four months, up from 4.9 percent in September. 80.5 percent of respondents believe business conditions will remain the same over the next four months, an increase from 61.0 percent in September. 9.8 percent of executives believe business conditions will worsen, a decrease from 34.1 percent in September.
- In October, 26.8 percent of respondents indicated they believe their company will increase spending on business development activities during the next six months, down from 30.0 percent in September. 68.3 percent believe there will be “no change” in business development spending, down from 70.0 percent last month, and 4.9 percent believe there will be a decrease in spending, up from no one who believed so last month.
- 58.5 percent of the leadership evaluates the current U.S. economy as “fair,” an increase from 55.0 percent last month. 41.5 percent rate it as “poor,” down from 45.0 percent in September.
- When asked, 14.6 percent of the executives reported they expect to hire more employees over the next four months, down from 17.5 percent in September. 78 percent expect no change in headcount over the next four months, an increase from 72.5 percent last month, while 7.3 percent expect fewer employees, a decrease from 10.0 percent in September.
- 17.1 percent of survey respondents believe demand for leases and loans to fund capital expenditures will increase over the next four months, an increase from 12.2 percent in September. 68.3 percent believe demand will “remain the same” during the same four-month time period, unchanged from the previous month. 14.6 percent believe demand will decline, down from 19.5 percent who believed so in September.
- 12.2 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, down from 15.0 percent in September. 87.8 percent of survey respondents indicate they expect the “same” access to capital to fund business, an increase from 82.5 percent the previous month. No survey respondents expect “less” access to capital, a decrease from 2.5 percent who expected less access to capital in September.
- 4.9 percent of survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 2.5 percent in September. 78.0 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, up from 75.0 percent in September. 17.1 percent responded that they believe economic conditions in the U.S. will worsen over the next six months, down from 22.5 percent who believed so last month.