The Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) came in at 72.2 in February, leveling off after January’s all-time high index of 73.4.

When asked about the outlook for the future, MCI-EFI survey respondent Thomas Partridge, President, Fifth Third Equipment Finance, said, “With the commitment of the Trump Administration to reduce regulation, we expect more companies to start thinking more about expansion and the growth of their business versus a focus on regulatory compliance. Longer term concerns are over the direction of tax policies and their impact on the equipment finance industry. Any movement toward expensing capital expenditures could impact our industry. We think this is more of a 2018 issue than a 2017 issue.”   

February 2017 Survey Results:
The overall MCI-EFI is 72.2, a decrease from the January index of 73.4.

•    When asked to assess their business conditions over the next four months, 69.2% of executives responding said they believe business conditions will improve over the next four months, a decrease from 74.2% in January. 26.9% of respondents believe business conditions will remain the same over the next four months, an increase from 22.6% in January. 3.8% believe business conditions will worsen, an increase from 3.2% the previous month.

•    53.8% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, a decrease from 71.0% in January.  42.3% believe demand will “remain the same” during the same four-month time period, up from 25.8% the previous month.  3.8% believe demand will decline, up from 3.2% who believed so in January.

•    15.4% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, a decrease from 19.4% who expected more in January.  84.6% of executives indicate they expect the “same” access to capital to fund business, an increase from 80.6% the previous month. None expect “less” access to capital, unchanged from last month.

•    When asked, 42.3% of the executives report they expect to hire more employees over the next four months, an increase from 35.5% in January. 50.0% expect no change in headcount over the next four months, a decrease from 61.3% last month. 7.7% expect to hire fewer employees, up from 3.2% in January.

•    None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from last month. 100.0% of the leadership evaluate the current U.S. economy as “fair,” and none evaluate it as “poor,” both also unchanged from January.

•    73.1% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 61.3% in January. 26.9% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 38.7% the previous month. None believe economic conditions in the U.S. will worsen over the next six months, unchanged from last month.

•    In February, 65.4% of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 58.1% in January. 34.6% believe there will be “no change” in business development spending, a decrease from 41.9% the previous month. None believe there will be a decrease in spending, unchanged from last month.