Outlook stable for equipment leasing market

Confidence in the equipment leasing market has dipped a little, but expectations for the year overall remain high, according to the latest data from the Equipment Leasing and Finance Foundation (ELFF).

ELFF’s May 2015 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), which is based on reports from key executives across the sector, now stands at 67.5, slightly lower than the April index of 70.7.

When asked about the outlook for the future, MCI-EFI survey respondent Valerie Hayes Jester, president, Brandywine Capital Associates, said: “We are experiencing strong application volume, which we attribute to more of our customers deciding to move forward with projects that have been ‘on hold’. Competition is brisk in the marketplace, but equipment financing seems to be the preferred method of acquisition in this quarter.”

Under a third (31%) of executives say they expect business conditions to improve over the next four months, down from 44.4% in April, with most feeling the outlook is likely to remain the same.

There has also been a drop in those who believe demand for leases and loans to fund capital expenditures will increase over the next four months, down from 48.2% in April to 34.6% currently. Two thirds (65.4%) believe demand will “remain the same” during the period, up from 51.9% the previous month.

Respondents are largely positive on US economy, with 34.6% believing conditions will get “better” over the next six months, and 65.4% indicating they will “stay the same”. None believe economic conditions in the US will worsen over the next six months, a decrease from 3.7% who believed so last month.

“We continue to see investment in the industries that we serve (agriculture and rural infrastructure), but customers are more cautious with investment than past years primarily due to depressed commodity prices and California drought,” reported Michael Romanowski, president, Farm Credit Leasing Services Corporation.