The April 2011 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) released by the Equipment Leasing & Finance Foundation (the Foundation) indicates that confidence in the equipment finance market is 70.3, a significant year-over-year increase from the April 2010 index of 65.4. The April 2011 index is down from the all-time high indexes of 72.4 in March and 71.6 in February, but up from the January index of 69.7.
Designed to collect leadership data, the index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $521 billion equipment finance sector.
When asked about the outlook for the future, survey respondent Russell Nelson, president, Farm Credit Leasing Services Corporation, remaining optimistic said, “Strong first quarter results reflect growing demand/need for replacement and new equipment and improved confidence in the current economy. Rising oil prices could impact but not significantly derail current capital spending for assets, as companies recognize the need for new equipment to support and drive new and growing business opportunities.”
Additional April 2011 survey results:
The overall MCI-EFI is 70.3, a decrease from the March index of 72.4.
When asked to assess their business conditions over the next four months, 54% of executives responding said they believe business conditions will improve over the next four months, a decrease from 67.5% in March. 46% of respondents believe business conditions will remain the same over the next four months, an increase from 32.5% in March.
65% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, unchanged from March. 35% believe demand will “remain the same” during the same four-month time period, also unchanged from the previous month.
37.8% of executives expect more access to capital to fund equipment acquisitions over the next four months, unchanged from March. 62.2% of survey respondents indicate they expect the “same” access to capital to fund business, also unchanged from the previous month. In the last five months’ surveys, no one responded that they expect “less” access to capital.
When asked, 37.8% of the executives reported they expect to hire more employees over the next four months, down from 40% in March. 56.8% expect no change in headcount over the next four months, an increase from 52.5% last month, while 5.4% expect fewer employees, a decrease from 7.5% in March.
86.5% of the leadership evaluate the current U.S. economy as “fair,” down from 92.5% who did in March. 13.5% rate it as “poor,” up from 7.5% in March.
43.2% of survey respondents believe that U.S. economic conditions will get “better” over the next six months, down from 57.5% in March. 48.6% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, up from 37.5% in March. 8.1% responded that they believe economic conditions in the U.S. will worsen over the next six months, up from 5.0% who believed so last month.
In April, 48.6% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 45% in March. 48.6% believe there will be “no change” in business development spending, down from 55% last month, and 2.7% believe there will be a decrease in spending, up from no one who believed so last month.
