Equipment Lease Finance Industry Confidence Decreases in December

The Equipment Leasing & Finance Foundation (the Foundation) releases the December 2012 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. 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 $725 billion equipment finance sector. Overall, confidence in the equipment finance market is 48.5, a decrease from the November index of 49.9, reflecting industry participants’ concerns regarding the impact of fiscal issues on capital expenditures, despite an overall sense of optimism in the equipment finance industry.
 
When asked about the outlook for the future, MCI survey respondent Russell Nelson, President, Farm Credit Leasing Services Corporation, said, “Regardless of actions or no action by Congress to address the fiscal cliff and extension of the Bush tax cuts, the equipment finance industry will be proactive in offering creative, innovative and reliable products and structures to retain its market share of financing needs, and remain an integral part of available finance solutions to all customers.”
 
December 2012 Survey Results:
The overall MCI-EFI is 48.5, down from the November index of 49.9.
 
·         When asked to assess their business conditions over the next four months, 5.9% of executives responding said they believe business conditions will improve over the next four months, down from 9.1% in November. 73.5% of respondents believe business conditions will remain the same over the next four months, up from 69.7% in November.  20.6% believe business conditions will worsen, down from 21.2% the previous month.
 
8.8% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, a decrease from 12.1% in November.  58.8% believe demand will “remain the same” during the same four-month time period, down from 63.6% the previous month. 32.4% believe demand will decline, up from 24.2% in November.
 
14.7% of executives expect more access to capital to fund equipment acquisitions over the next four months, down from 21.2% in November. 85.3% of survey respondents indicate they expect the “same” access to capital to fund business, an increase from 72.7% the previous month. No one expects “less” access to capital, down from 6.1% who expected less access to capital in November.
 
When asked, 23.5% of the executives reported they expect to hire more employees over the next four months, down from 33.3% in November.  64.7% expect no change in headcount over the next four months, up from 54.5% last month.  11.8% expect fewer employees, down from 12.1% of respondents who expected fewer employees in November.
 
76.5% of the leadership evaluates the current U.S. economy as “fair,” down from 78.8% last month.  23.5% rate it as “poor,” up from 21.2% in November.
 
11.8% of survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 6.1% in November.  55.9% of survey respondents indicate they believe the U.S. economy will “stay the same” over the next six months, down from 66.7% in November.  32.4% believe economic conditions in the U.S. will worsen over the next six months, an increase from 27.3% who believed so last month.
 
In December, 35.3% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 27.3% in November. 58.8% believe there will be “no change” in business development spending, down from 63.6% last month, and 5.9% believe there will be a decrease in spending, down from 9.1% who believed so last month.
 
About the Foundation
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that provides vision for the equipment leasing and finance industry through future-focused information and research. Primarily funded through donations, the Foundation is the only organization dedicated to future-oriented, in-depth, independent research for the leasing industry. Visit the Foundation online at www.LeaseFoundation.org and follow us on Twitter @LeaseFoundation.

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