Confidence holds steady in equipment finance market

Confidence in the equipment finance market is holding steady mid-year, according to the latest data from the Equipment Leasing and Finance Foundation.

Its July monthly confidence index for the equipment finance industry (MCI-EFI) stood at 52.5 overall, remaining in line with the June index of 52.3.

The survey findings show that there has been an increase in positive outlook amongst respondents. When asked to assess their business conditions over the next four months, 12.1% of executives said they believe business conditions will improve over the next four months, an increase from 9.4% in June.

Three-quarters (75.8%) of respondents believe business conditions will remain the same over the next four months, an increase from 68.8% in June, and there has been a drop in those who believe conditions will worsen down to 12.1% compared to 21.9% the previous month.

Almost a third (30.3%) believe demand for leases and loans to fund capital expenditures (capex) will decline over the next four months will decline, an increase from 21.9% who believed so in June.

However, twice as many (12.1%) of survey respondents believe capex demand will increase, up from 6.3% in June. Half (57.6%) believe demand will “remain the same” during the same four-month time period, down from 71.9% the previous month.

The proportion of executives who expect more access to capital to fund equipment acquisitions over the next four months is relatively unchanged from 15.6% in June, while. 78.8% indicate they expect the “same” access, a decrease from 81.3% the previous month. Double the number (6.1%) expect “less” access to capital, an increase from 3.1% last month.

None of the leadership evaluates the current US economy as “excellent,” unchanged from last month. In contrast 100% describe it as “fair,” an increase from 96.9% last month. None evaluates it as “poor,” a decrease from 3.1% in June.

Fewer respondents believe that US economic conditions will get “better” over the next six months, down to 3%, a decrease from 6.5% in June, while most (78.8%) indicate they believe the US economy will “stay the same” over the remainder of the year.

“The political and economic environments will continue to create uncertainly for the foreseeable future. As such, investment in capital equipment will continue to be erratic. I would expect a bumpy ride for the equipment finance industry for the remainder of 2016,” commented Thomas Jaschik, president, BB&T Equipment Finance.