Equipment finance market confidence at four-year high

Confidence in the equipment finance market is at a four-year high according to the latest data from the Equipment Leasing and Finance Foundation (ELFF) based on the forecasts from key executives in the sector.

The Foundation’s March 2015 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) records overall confidence at 72.1, up from the February index of 66.3.

Half (50%) of executives responding said they believe business conditions will improve over the next four months, up from 30% in February, while none believe business conditions will worsen, down from 6% who believed so the previous month.

Twice as many (12.5%) class the current US economy as “excellent,” compared to 6.1% last month, while the proportion of the survey respondents who maintain that US economic conditions will get “better” or “stay the same” was unchanged, and none believe economic conditions will worsen over the next six months.

However, despite the good news, the outlook for 2015 is tinged with caution. Harry Kaplun, president, Frost Equipment Leasing and Finance, said: “Equipment financing demand is continuing although there are increasing clouds of uncertainty. In particular the full impact of lower oil prices has not been seen. This favorable event for consumers has a mixed impact commercially.”

The survey showed a slight dip in the number who believe demand for leases and loans to fund capital expenditures will increase over the next four months, which now stands at 41.7% compared to 42.4% in February. There has also been a drop in the number who expect more access to capital to fund equipment acquisitions over the next four months, down from 27.3% in February to 25% currently.

“Economists will be playing catch-up for the balance of 2015 in order to achieve their consensus 3% growth in GDP. If we get there it will be a very good year for the equipment finance industry. So far, we are lagging behind,” said Thomas Jaschik, president, BB&T Equipment Finance