US equipment finance industry confidence eases in March

The Equipment Leasing & Finance Foundation has released the March 2023 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI). The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the US$1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 50.3, a decrease from the February index of 51.8.

When asked about the outlook for the future, MCI-EFI survey respondent Nancy Pistorio (pictured), Foundation Chair and President, Madison Capital LLC, said, “As the pandemic becomes farther in the rear-view mirror, industries affected such as livery, fitness, entertainment, and hospitality are now showing strong demand for equipment.”

March 2023 survey results: The overall MCI-EFI is 50.3, a decrease from the February index of 51.8.

When asked to assess their business conditions over the next four months, 10.7% of the executives responding said they believe business conditions will improve over the next four months, a decrease from 16.1% in February. 57.1% believe business conditions will remain the same over the next four months, down from 61.3% the previous month. 32.1% believe business conditions will worsen, an increase from 22.6 % in February.

10.7% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 9.7% in February. 67.9% believe demand will “remain the same” during the same four-month timeperiod, a decrease from 71% the previous month. 21.4% believe demand will decline, up from 19.4% in February.

17.9% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 12.9% in February. 71.4% of executives indicate they expect the “same” access to capital to fund business, a decrease from 74.2% last month. 10.7% expect “less” access to capital, down from 12.9% the previous month.

When asked, 35.7% of the executives report they expect to hire more employees over the next four months, a decrease from 38.7% in February. 57.1% expect no change in headcount over the next four months, an increase from 54.8% last month. 7.1% expect to hire fewer employees, up from 6.5% in February.

3.7% of the leadership evaluate the current U.S. economy as “excellent,” up from none the previous month. 88.9% of the leadership evaluate the current U.S. economy as “fair,” up from 87.1% in February. 7.4% evaluate it as “poor,” a decrease from 12.9% last month.

3.6% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a slight increase from 3.2% in February. 53.6% indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 54.8% last month. 42.9% believe economic conditions in the U.S. will worsen over the next six months, an increase from 41.9% the previous month.

In March 39.3% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 51.6% the previous month. 53.6% believe there will be “no change” in business development spending, up from 41.9% in February. 7.1% believe there will be a decrease in spending, up from 6.5% last month.