Equipment finance industry confidence improves in August

The Equipment Leasing and Finance Foundation releases the August 2022 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). The index reports a qualitative assessment of current business conditions and expectations for the future, as reported by top executives in the $900 billion equipment finance industry. Overall, confidence in the equipment finance market is at 50, an increase from July’s index of 46.1.

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Asked about the outlook for the future, MCI-EFI survey respondent Dave Fate, managing director of Stonebriar Commercial Finance, said:

“The resilience of the equipment leasing and financing industry continues to show itself in 2022. Over the decades, the industry has weathered and thrived through recessions, a financial crisis and a global health pandemic. We are all now facing the challenges of supply chain disruption, inflation, labor shortages and the “noise” that accompanies the upcoming midterm elections just months away. Regardless of these challenges, the industry is still performing well. Speaking on behalf of Stonebriar Commercial Finance, I am pleased to report that SCF is at record pace in terms of business volume and profitability this year, and that our portfolio continues to perform exceptionally well.

August 2022 Survey Results

The overall MCI-EFI is 50, an increase from July’s index of 46.1.

• When asked to rate their business conditions over the next four months, 14.8% of responding executives said they believe business conditions will improve over the next four months, an increase from from 3.7% in July. 51.9% believe trading conditions will remain the same over the next four months, up from 63% the previous month. 33.3% think business conditions will deteriorate, unchanged from July.

• 7.7% of respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 11.1% in July. 76.9% believe demand will “stay the same” over the same four-month period, up from 55.6% the previous month. 15.4% think demand will decline, down from 33.3% in July.

• 7.4% of respondents expect greater access to capital to finance equipment acquisitions over the next four months, compared to 11.1% in July. 85.2% of executives say they expect the “same” access to capital to fund their businesses, up from 81.5% last month. 7.4% expect “less” access to capital, unchanged from the previous month.

• Surveyed, 25.9% of executives say they expect to hire more employees in the next four months, compared to 18.5% in July. 74.1% expect no change in the workforce over the next four months, up from 77.8% last month. None expect to hire fewer employees, down from 3.7% in July.

• None of the leaders rates the current US economy as “excellent”, down from 11.1% the previous month. 85.2% of executives rate the current US economy as “fair,” up from 77.8% in July. 14.8% rate it as “poor”, an increase from 11.1% last month.

• 11.1% of survey respondents believe that US economic conditions will improve over the next six months, up from 7.4% in July. 51.9% say they think the US economy will “stay the same” over the next six months, up from 40.7% last month. 37% think economic conditions in the United States will deteriorate over the next six months, down from 51.9% the previous month.

• In August, 29.6% of respondents said they believed their company would increase its spending on business development activities over the next six months, up from 22.2% the previous month. 70.4% believe there will be “no change” in business development spending, up from 74.1% in July. No one thinks there will be a drop in spending, down from 3.7% last month.

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