Equipment Finance Industry Confidence Higher in July

The Equipment Leasing & Finance Foundation (the Foundation) released the July 2023 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) recently. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 46.4, an increase from the June index of 44.1.

When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, President and Chief Executive Officer, Wintrust Specialty Finance, said, “The equipment leasing and finance industry as a whole is relatively nimble. That is and will continue to be tested this year. I am confident that the industry will step up to the challenges and create solutions to meet the needs of our partners and customers.”

July 2023 Survey Results:

The overall MCI-EFI is 46.4, an increase from the June index of 44.1.

• When asked to assess their business conditions over the next four months, 7.7% of the executives responding said they believe business conditions will improve over the next four months, an increase from 3.3% in June. 65.4% believe business conditions will remain the same over the next four months, down from 73.3% the previous month. 26.9% believe business conditions will worsen, an increase from 23.3% in June.
• 7.7% 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 6.7% in June. 69.2% believe demand will “remain the same” during the same four-month time period, an increase from 66.7% the previous month. 23.1% believe demand will decline, down from 26.7% in June.
• 7.7% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 6.7% in June. 76.9% of executives indicate they expect the “same” access to capital to fund business, unchanged from last month. 15.4% expect “less” access to capital, down from 16.7% the previous month.
• When asked, 15.4% of the executives report they expect to hire more employees over the next four months, an increase from 13.3% in June. 76.9% expect no change in headcount over the next four months, unchanged from last month. 7.7% expect to hire fewer employees, down from 10% in June.
• 3.9% of the leadership evaluate the current U.S. economy as “excellent,” up from none the previous month. 80.8% of the leadership evaluate the current U.S. economy as “fair,” down from 83.3% in June. 15.4% evaluate it as “poor,” a decrease from 16.7% last month.
• 11.5% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 6.7% in June. 53.9% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 40% last month. 34.6% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 53.3% the previous month.
• In July, 26.9% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 30% the previous month. 61.5% believe there will be “no change” in business development spending, up from 56.7% in June. 11.5% believe there will be a decrease in spending, down from 13.3% last month.