ELFF: confidence in the equipment financing sector eases in December

According to Foundation for leasing and financing of equipment‘s Monthly confidence index for December 2021 for the equipment financing sector, overall confidence in the equipment finance market is 63.9, down from the November index of 64.6.

“The near-term future of the equipment finance industry looks bright for continued expansion,” said Daniel J. Krajewski, President and CEO of Sertant Capital. “As the infrastructure bills are passed and implemented, there will be demand for many asset classes, from construction to IT platforms. This, of course, will need to be supported by increased manufacturing capacity to build all the necessary capital goods. I have concerns about the political atmosphere that currently exists in the United States that could slow or even kill the entire infrastructure bill, and second, the supply chain issues that have hampered the delivery system. some products.

When asked to rate their trading conditions over the next four months, 34.6% of executives said they believed trading conditions would improve, unchanged from November, while 61.5% % believe trading conditions will remain the same, up from 46.2% in November. The remaining 3.9% believe economic conditions will deteriorate over the next four months, down from 19.2% in November.

“There is still significant liquidity in the markets and productivity continues to thrive. The impact of inflation and upcoming rate hikes could put a hold on a pause, but we continue to see strong demand on capital spending, ”said Aylin Cankardes, president of Rockwell Financial Group. “The biggest hurdle is the protracted supply chain disruptions, but it’s encouraging to see organizations transforming to tackle them in innovative ways through 2022.”

Just over a quarter (26.9%) of respondents believe the demand for leases and loans to finance capital spending (capex) will increase over the next four months, up from 42.3% in November, while 73.1% believe demand will “stay the same” over the same four-month period, an increase from 50% in November. None think demand will decline, up from 7.7% in November.

“The demand for loans and equipment rentals remains strong in almost all sectors. Large US companies are looking for fixed rate financing as a strategy to mitigate the impact of inflation, ”said Alan Sikora, CLFP, CEO of First American Equipment Finance.

“Demand for capital spending remains robust. Customers are looking to alleviate labor shortage issues through automation, ”said Michael Romanowski, president of Farm Credit Leasing. “We believe this trend will continue through 2022 and 2023. Supply chain headwinds continue to thwart automation plans.

In December, 19.2% of survey respondents said they expected increased access to capital to finance equipment acquisitions over the next four months, up from 26.9% in November, while 80.8% of executives have indicated that they expect the “same” access to capital to finance their operations. , an increase from 73.1% last month. No one expects “less” access to capital, unchanged from November.

When asked, 42.3% of executives said they expected to hire more employees in the next four months, up from 53.9% in November, while 57.7% do not expect any change in headcount in the next four months. next four months, an increase from 46.2% last month. None expect to hire fewer employees, unchanged from November.

In December, 19.2% of executives rated the current US economy as “excellent,” an increase from 15.4% in November, while 76.9% of executives rated the current US economy as “ fair ”, against 80.8% in November. The remaining 3.9% of executives rated the current US economy as “poor,” unchanged from last month.

“Our customers remain resilient, fueling the pandemic, supply chain issues and inflation to meet their goals,” said Adam Warner, president of Key Equipment Finance. “Key remains vigilant that the continuing battle against COVID will ultimately reduce the risks to our customers and our economy. “

This month, 19.2% of those polled believe that U.S. economic conditions will improve over the next six months, down from 23.1% in November, while 61.5% believe that the US economy will “stay the same” over the next six months. an increase from 57.7% last month. At the same time, 19.2% believe economic conditions in the United States will deteriorate over the next six months, unchanged from November.

In December, 46.2% of those polled said they believed their company would increase spending on business development activities over the next six months, up from 42.3% the month before, while 53.9% believe there will be “no change” in business development spending, down from 57.7% in November. None believe there will be a decrease in spending, unchanged from last month.

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