The Equipment Leasing & Finance Foundation found confidence in the equipment finance market decreased slightly in its March Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI).
The index is a qualitative assessment of current business conditions and future expectations as reported by key executives from the $1 trillion equipment-finance sector.
Overall, confidence in the equipment finance market sits at 72.2 in March, easing down one point from 73.2 in February.
Despite the small dip, survey respondents were positive about the future.
“We are seeing growth in [capital expenditure] spending across a broad segment of the economy,”said MCI-EFI survey respondent Anthony Cracchiolo, president and CEO of the U.S. Bank Equipment Finance. “While some areas are expanding more quickly than others, all are moving in a positive direction. Businesses are more positive than we have seen in over a decade and activity is picking up momentum. The equipment finance industry is healthy and poised to support the expanding economy.”
March 2018 Survey Results:
When asked to assess their business conditions over the next four months, 54.8% of executives responding said they believe business conditions will improve over the next four months, an increase from 46.4% in February. About 45% of respondents believe business conditions will remain the same over the next four months, a decrease from 53.6% the previous month. None believe business conditions will worsen, unchanged from the previous month.
Other index highlights include:
Confidence in the U.S. economy and the capital markets is a critical driver to the equipment finance industry. Throughout history, when confidence increases, consumers, and businesses are more apt to acquire more consumer goods, equipment, and durables, and invest at prevailing prices. When confidence decreases, spending and risk-taking tend to fall. Investors are said to be confident when the news about the future is good and stock prices are rising.
The respondents are comprised of a wide cross-section of industry executives, including large-ticket, middle-market, and small-ticket banks, independents, and captive equipment finance companies. The MCI-EFI uses the same pool of 50 organization leaders to respond monthly to ensure the survey’s integrity. Since the same organizations provide the data from month to month, the results constitute a consistent barometer of the industry's confidence.
Survey results are posted on the Foundation website, https://www.leasefoundation.org/industry-resources/monthly-confidence-index/ and included in the Foundation Forecast eNewsletter. Survey respondent demographics and additional information about the MCI are also available at the link above.