US equipment finance industry confidence up three consecutive months

• When asked to assess their business conditions over the next four months, 19.4% of the executives responding said they believe business conditions will improve over the next four months, an increase from 10.7% in February. 77.4% believe business conditions will remain the same over the next four months, down from 82.1% the previous month. 3.2% believe business conditions will worsen, a decrease from 7.1% in February.
• 25.8% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 7.1% in February. 71% believe demand will “remain the same” during the same four-month time period, down from 78.6% the previous month. 3.2% believe demand will decline, a decrease from 14.3% in February.
• 16.1% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 14.3% in February. 74.2% of executives indicate they expect the “same” access to capital to fund business, down from 75% last month. 9.7% expect “less” access to capital, down from 10.7% the previous month.
• When asked, 19.4% of the executives report they expect to hire more employees over the next four months, a decrease from 21.4% in February. 67.7% expect no change in headcount over the next four months, down from 71.4% last month. 12.9% expect to hire fewer employees, up from 7.1% in February.
• None of the leadership evaluate the current US economy as “excellent,” down from 3.6% the previous month. 93.6% of the leadership evaluate the current US economy as “fair,” up from 89.3% in February. 6.5% evaluate it as “poor,” down from 7.1% last month.
  • 25.8% of the survey respondents believe that US economic conditions will get “better” over the next six months, up from 17.9% in February. 54.8% indicate they believe the US economy will “stay the same” over the next six months, a decrease from 67.9% last month. 19.4% believe economic conditions in the US will worsen over the next six months, an increase from 14.3% the previous month. In March, 22.6% of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 21.4% the previous month. 64.5% believe there will be “no change” in business development spending, down from 67.9% in February. 12.9% believe there will be a decrease in spending, up from 10.7% last month.

When asked about the outlook for the future, MCI-EFI survey respondent Keith Smith, President, Equipment & Franchise Finance at Star Hill Financial LLC (pictured), said, “Supply chain and demand seemed to have caught up to each other, we are finally seeing equipment ordered and delivered in real time. This has increased the overall activity in the equipment funding space.

“My biggest concern is the volatility the financial markets, specifically the health of mid-market/regional banks. Historically these institutions have been the backbone of funding in the equipment finance industry, and right now even the deposit-healthy institutions are slowing their lending due to regulatory concerns.”