Equipment finance confidence at all time high

Overall confidence in the equipment finance market has hit an all-time high according to the latest data from the Equipment Leasing and Finance Foundation, which says prospects for the sector over the year are looking brighter than for some time.

The Foundation’s January 2017 monthly confidence index for the equipment finance industry (MCI-EFI) now stands at 73.4, an increase from the December index of 67.5, and the highest index since the MCI was launched in May 2009 to track recovery after the 2008 downturn.

Survey respondent Thomas Jaschik, president, BB&T Equipment Finance, said: “The outlook for US companies has become much more positive since the presidential election. Lower taxes, less regulation and rising interest rates will be the catalyst to spur capital asset acquisitions. This will undoubtedly set the stage for robust equipment finance activity.”

Conditions improve

When asked to assess their business conditions over the next four months, 74.2% of executives said they believe business conditions will improve over the next four months, an increase from 48.4% in December. The proportion who thinks believe business conditions will worsen has halved, down to 3.2% from 6.5% the previous month.

There is also strong growth in survey respondents (71%) who believe demand for leases and loans to fund capital expenditures will increase over the next four months, up from 38.7% in December. A quarter (25.8%) believe demand will “remain the same”, down from 54.8% the previous month. There has been a halving of the number (3.2%) who believe demand will decline, down from 6.5% who believed so in December.

Most (61.3%) of the survey respondents believe that US economic conditions will get “better” over the next six months, a decrease from 71% in December. Over a third (38.7%) indicate they believe the US economy will “stay the same” over the next six months, an increase from 25.8% the previous month. None believe economic conditions in the US will worsen over the next six months, a decrease from 3.2% who believed so last month.