Confidence Index Down Slightly in November for Equipment Lease Finance Industry

Nov. 20, 2012
The Equipment Leasing & Finance Foundation’s November Confidence Index for the Equipment Finance Industry was 49.9, a decrease from the October index of 53.3, reflecting many industry participants’ post-election concerns over issues including the fiscal cliff, economic policy and taxes

The Equipment Leasing & Finance Foundation’s November Confidence Index for the Equipment Finance Industry was 49.9, a decrease from the October index of 53.3, reflecting many industry participants’ post-election concerns over issues including the fiscal cliff, economic policy and taxes.

A confidence level of 50.0 indicates a neither positive nor negative outlook overall.

The Index is an assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $628 billion equipment finance sector.

When asked about the outlook for the future, MCI survey respondent Thomas Jaschik, President, BB&T Equipment Finance, said “The business community is waiting for positive signals from Washington before making additional investments. Investments in capital equipment and equipment financing will remain stagnant until such time.”

  • When asked to assess their business conditions over the next four months, 9.1% of executives responding said they believe business conditions will improve over the next four months, up from 8.6% in October. 69.7% of respondents believe business conditions will remain the same over the next four months, down from 74.3% in October. 21.2% believe business conditions will worsen, up from 17.1% the previous month.
  • 12.1% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, a decrease from 20% in October. 63.6% believe demand will “remain the same” during the same four-month time period, up from 57.1% the previous month. 24.2% believe demand will decline, up from 22.9% in October.
  • 21.2% of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 20% in October. 72.7% of survey respondents indicate they expect the “same” access to capital to fund business, a decrease from 80% the previous month. 6.1% expect “less” access to capital, up from no one who expected less access to capital in October.
  • When asked, 33.3% of the executives reported they expect to hire more employees over the next four months, down from 34.3% in October. 54.5% expect no change in headcount over the next four months, down from 57.1% last month. 12.1% expect fewer employees, up from 8.6% of respondents who expected fewer employees in October.
  • 78.8% of the leadership evaluates the current U.S. economy as “fair,” up from 65.7% last month. 21.2% rate it as “poor,” down from 34.3% in October.
  • 6.1% of survey respondents believe that U.S. economic conditions will get “better” over the next six months, down from 8.6% in October. 66.7% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, down from 77.1% in October. 27.3% believe economic conditions in the U.S. will worsen over the next six months, an increase from 14.3% who believed so last month.
  • In November, 27.3% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 37.1% in October. 63.6% believe there will be “no change” in business development spending, up from 62.9% last month, and 9.1% believe there will be a decrease in spending, up from no one who believed so last month.