Confidence in the equipment finance market for July is 56.2, up 6.8 percent from the June index of 52.6, according to the Equipment Leasing & Finance Foundation’s 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 $521 billion equipment finance sector.
When asked to assess their business conditions over the next four months, 14% of executives responding said they believe business conditions will improve, an increase from 5.0% in June. 81.4% of respondents believe business conditions will remain the same over the next four months, an increase from 79.5% in June. 4.7% of executives believe business conditions will worsen, a decrease from 15.4% in June.
“We continue to wait for the micro and small business segment of the economy to pick up,” said survey respondent Paul Menzel, president and CEO of Financial Pacific Leasing, LLC. “Consumers continue to lack confidence in the economy and are debt averse and/or de-leveraging their balance sheets. The political gridlock on the deficit is a threat to this already fragile recovery.”
When asked about the outlook for the future, 14% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 12.8% in June. 74.4% believe demand will “remain the same” during the same four-month time period, a decrease from 77% the previous month. 11.6% believe demand will decline, up from 10% who believed so in June.
23% of executives expect more access to capital to fund equipment acquisitions over the next four months, flat from June. 76.7% of survey respondents indicate they expect the “same” access to capital to fund business, also flat with the previous month. In the last eight months’ surveys, no one responded that they expect “less” access to capital.
When asked about hiring plans, 32.6% of the executives reported they expect to hire more employees over the next four months, down from 33.3% in June. 58% expect no change in headcount over the next four months, an increase from 53.8% last month, while 9.6% expect fewer employees, a decrease from 12.8% in June.
72% of the leadership evaluate the current U.S. economy as “fair,” up from 66.7% who did in June. 27.9% rate it as “poor,” down from 33.3% last month.
9.3% of survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 5.0% in June. 79% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, down from 82% in June. 11.6% responded that they believe economic conditions in the U.S. will worsen over the next six months, down from 12.8% who believed so last month.
In July, 44.2% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 28% in June. 55.8% believe there will be “no change” in business development spending, down from 69% last month, and no one believes there will be a decrease in spending, down from 2.6% who believed so last month.