Downward trends in both gas prices and unemployment statistics are increasing confidence in the industry.
The Equipment Leasing & Finance Foundation (the Foundation) released the November 2014 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). 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 $903 billion equipment finance sector. Overall, confidence in the equipment finance market is 64.2, an increase from the October index of 60.4 and the highest level since May.
When asked about the outlook for the future, MCI-EFI survey respondent Valerie Hayes Jester, president, Brandywine Capital Associates Inc., said, “The mid-term elections are now over and consumer confidence seems to be improving as gas prices and unemployment statistics continue to decrease. We have experienced an increase in demand for capital equipment purchases and, more importantly, financing for those orders. Another important note is that the equipment being requisitioned appears to be associated with business expansion and not just replacement of older assets.”
November 2014 Survey Results
The overall MCI-EFI is 64.2, an increase from the October index of 60.4.
• When asked to assess their business conditions over the next four months, 27.3 percent of executives responding said they believe business conditions will improve over the next four months, up from 23 percent in October. 69.7 percent of respondents believe business conditions will remain the same over the next four months, down from 74 percent in October. 3 percent believe business conditions will worsen, unchanged from the previous month.
• 30.3 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 25.7 percent in October. 66.7 percent believe demand will “remain the same” during the same four-month time period, down from 71.4 percent the previous month. 3 percent believe demand will decline, unchanged from October.
• 21.2 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 11.4 percent in October. 78.8 percent of survey respondents indicate they expect the “same” access to capital to fund business, down from 88.6 percent in October. None expect “less” access to capital, unchanged from the previous month.
• When asked, 45.4 percent of the executives reported they expect to hire more employees over the next four months, an increase from 40 percent in October. 48.5 percent expect no change in headcount over the next four months, unchanged from last month. 6.1 percent expect fewer employees, down from 11.4 percent in October.
• 3 percent of the leadership evaluate the current U.S. economy as “excellent,” unchanged from last month. 97 percent of the leadership evaluate the current U.S. economy as “fair,” up from 94.3 percent in October. None rate it as “poor,” down from 3 percent the previous month. .
• 42.4 percent of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 28.6 percent who believed so in October. 54.6 percent of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, down from 68.6 percent in October. 3 percent believe economic conditions in the U.S. will worsen over the next six months, unchanged from last month.
• In November, 42.4 percent of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 34.3 percent in October. 54.6 percent believe there will be “no change” in business development spending, a decrease from 63 percent last month. 3 percent believe there will be a decrease in spending, unchanged from last month.
For more information, visit www.LeaseFoundation.org.
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