Equipment Finance Industry Confidence Eases in March

According to the Equipment Leasing & Finance Foundation’s March 2023 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), overall confidence in the equipment finance market is at a mark of 50.3, a decrease from the February index of 51.8.

As the pandemic becomes farther in the rear-view mirror, industries affected, such as livery, fitness, entertainment and hospitality, are now showing strong demand for equipment,” Nancy Pistorio, chair of the ELFF and president of Madison Capital, said.

When asked to assess their business conditions over the next four months, 10.7% of the executives responding said they believe business conditions will improve over the next four months, a decrease from 16.1% in February, while 57.1% believe business conditions will remain the same over the next four months, down from 61.3% in February, and 32.1% believe business conditions will worsen, an increase from 22.6 % in February.

This month, 10.7% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 9.7% in February, and 67.9% believe demand will “remain the same” during the same four-month time period, a decrease from 71% the previous month, while 21.4% believe demand will decline, up from 19.4% in February.

According to the survey, 17.9% of respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 12.9% in February, while 71.4% of executives indicated they expect the “same” access to capital to fund business, a decrease from 74.2% last month, and 10.7% expect “less” access to capital, down from 12.9% in February.

When asked, 35.7% of the executives reported they expect to hire more employees over the next four months, a decrease from 38.7% in February, while 57.1% expect no change in headcount over the next four months, an increase from 54.8% last month, and 7.1% expect to hire fewer employees, up from 6.5% in February.

In the March survey, 3.7% of the leadership evaluated the current U.S. economy as “excellent,” up from none in February, while 88.9% of the leadership evaluated the current U.S. economy as “fair,” up from 87.1% in February, and 7.4% evaluated it as “poor,” a decrease from 12.9% last month.

According to the survey, 3.6% of respondents believe that United States economic conditions will get “better” over the next six months, a slight increase from 3.2% in February, while 53.6% indicated they believe the U.S. economy will “stay the same” over the next six months, a decrease from 54.8% last month, and 42.9% believe economic conditions in the United States will worsen over the next six months, an increase from 41.9% in February.

In March, 39.3% of respondents indicated they believe their company will increase spending on business development activities during the next six months, down from 51.6% the previous month, while 53.6% believe there will be “no change” in business development spending, up from 41.9% in February, and 7.1% believe there will be a decrease in spending, up from 6.5% last month.

“Wintrust is well positioned to grow during this time of uncertainty given our strong balance sheet and commitment to the equipment finance space and our customers,” David Normandin, president and CEO of Wintrust Specialty Finance, said.

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