“Donald Trump effect” keeps market confidence high

Confidence in the equipment finance market remains at historic highs, despite dipping slightly since the start of the year, according to new research.

The latest monthly confidence index for the equipment finance industry (MCI-EFI) produced by the Equipment Leasing and Finance Foundation, shows overall market confidence during March is 71.1, easing from the February index of 72.2, but remaining among the highest levels of the last two years.

The index is based on leadership data from a panel of executives,

Survey respondent Thomas Jaschik, president of BB&T Equipment Finance, said: “The ‘Trump Effect’ appears to be having a positive impact on the equipment finance market. Customer demand has increased over 2016 levels.

“A positive outlook on taxes and regulation seems to have been the catalyst for increased capital expenditures. If the promises come to life it could be a banner year for the US economy and the equipment finance industry.”

Improvement ahead

When asked to assess their business conditions over the next four months, 70% of executives said they believed these will improve. This is similar to the survey in February (69.2%).

One-in-five (20%) respondents believed business conditions will remain the same over the period, a decrease from 26.9% in February as the proportion expecting conditions to get worse has risen to 10% from 3.8%.

There was an increase in respondents who said demand for leases and loans to fund capital expenditure will increase over the next four months, which now stands at 70% compared to 53.8% in February.

As in previous monthly surveys, 100% of the leadership evaluate the current US economy as ‘fair’ and none evaluate it as ‘poor’.

Nearly two-thirds of respondents (60%) believed that US economic conditions will get better over the next six months, a decrease from 73.1% in February.

Frank Campagna, group vice president, line of business manager, M&T Bank Commercial Equipment Finance, said: “We are encouraged by continued loan/lease demand for equipment spends by our core client base, especially in the heavy equipment, marine and renewable energy sectors.

“Looking beyond the current softness of the rail sector, we feel demand will increase later in the year and beyond as older cars are retired.”