Industry Confidence Shows Continued Improvement, Reaches New High



The Equipment Leasing & Finance Foundation released the February 2011 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). 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. Overall, confidence in the equipment finance market is 71.6, an increase from the January index of 69.7, and a new high level since the index was launched in May 2009.

When asked about the outlook for the future, survey respondent Russell Nelson, president, Farm Credit Leasing said, “Economic indicators and market conditions are stimulating increased interest in new capital expenditures and plant expansions, as evidenced by demand for financing in December and January, and a growing transaction pipeline for the first and second quarters of 2011. Customers are expressing cautious optimism for their markets and an improving business climate for 2011.”

February 2011 Survey Results:

The overall MCI-EFI is 71.6, an increase from the January index of 69.7.

When asked to assess if their current business conditions would remain the same over the next four months, 55.3% of executives responding said they believe business conditions will improve over the next four months, an increase from 52.6% in January. 44.7% of respondents believe business conditions will remain the same over the next four months, unchanged from January.

  • 55.3% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 57.9% in January. 42.1% believe demand will “remain the same” during the same four-month time period, up from 39.5% in January. 2.6% believe demand will decrease, flat for the last three months.
  • 34.2% of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 31.6% in January. 65.8% of survey respondents indicate they expect the “same” access to capital to fund business, a decrease from 68.4% in January. In the last three months’ surveys, no one responded that they expect “less” access to capital.
  • When asked, 44.7% of the executives reported they expect to hire more employees over the next four months, up from 39.5% in January. 52.6% expect no change in headcount over the next four months, unchanged from last month, while 2.6% expect fewer employees, improved from 7.9% in January.
  • When asked to assess if their current business conditions would remain the same over the next four months, 55.3% of executives responding said they believe business conditions will improve over the next four months, an increase from 52.6% in January. 44.7% of respondents believe business conditions will remain the same over the next four months, unchanged from January.
  • 55.3% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 57.9% in January. 42.1% believe demand will “remain the same” during the same four-month time period, up from 39.5% in January. 2.6% believe demand will decrease, flat for the last three months.
  • 34.2% of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 31.6% in January. 65.8% of survey respondents indicate they expect the “same” access to capital to fund business, a decrease from 68.4% in January. In the last three months’ surveys, no one responded that they expect “less” access to capital.
  • When asked, 44.7% of the executives reported they expect to hire more employees over the next four months, up from 39.5% in January. 52.6% expect no change in headcount over the next four months, unchanged from last month, while 2.6% expect fewer employees, improved from 7.9% in January.
  • When asked to assess if their current business conditions would remain the same over the next four months, 55.3% of executives responding said they believe business conditions will improve over the next four months, an increase from 52.6% in January. 44.7% of respondents believe business conditions will remain the same over the next four months, unchanged from January.
  • 55.3% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 57.9% in January. 42.1% believe demand will “remain the same” during the same four-month time period, up from 39.5% in January. 2.6% believe demand will decrease, flat for the last three months.
  • 34.2% of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 31.6% in January. 65.8% of survey respondents indicate they expect the “same” access to capital to fund business, a decrease from 68.4% in January. In the last three months’ surveys, no one responded that they expect “less” access to capital.
  • When asked, 44.7% of the executives reported they expect to hire more employees over the next four months, up from 39.5% in January. 52.6% expect no change in headcount over the next four months, unchanged from last month, while 2.6% expect fewer employees, improved from 7.9% in January.

    “We are continuing to see an improving economy and increased demand for equipment financing.” Senior executive, Large-Ticket Bank

    Bank, Middle Market

    “I believe 100 percent bonus depreciation coupled with the pent-up demand for equipment acquisitions will increase new business volume for 2011.” Thomas Jaschik, President, BB&T Equipment Finance

    Independent, Small Ticket

    “I am bullish on the industry. As the economy continues to recover, our industry will play a vital role in that restart. In the small ticket sector, equipment finance will help many companies upgrade their business equipment and conserve cash.” Valerie Hayes Jester, President, Brandywine Capital Associates, Inc.

    To find out more about the MCI-EFI, click here.


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