US equipment finance confidence hits three-year high

The US equipment finance industry is seeing a significant surge in confidence, with optimism reaching its highest level since August 2021. According to the Equipment Leasing & Finance Foundation’s (the Foundation) November 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI), the overall confidence index stands at 67.5, a notable rise from October’s 61.8.

The MCI-EFI, a qualitative assessment of prevailing business conditions and future expectations, reflects perspectives from leaders across the $1.3 trillion equipment finance sector. Notably, this month’s survey responses were evenly split between submissions made before and after the recent elections.

Charles Jones, Senior Vice President at 1st Equipment Finance, Inc., highlighted the industry’s resilience despite political and economic uncertainties.

“Businesses still need equipment,” Jones said. “Political uncertainty has had an impact and should resolve itself. With the election behind us, businesses will need to continue to operate and look to grow. Calmer heads seem to be prevailing, and the industry is coming back. Delinquency has hopefully levelled, and lenders are licking their wounds and looking forward.”

The November survey reveals increasing optimism across multiple indicators:

Business Conditions: 43.3% of executives anticipate improved business conditions in the next four months, up from 37.9% in October. While 50% expect conditions to remain stable, just 6.7% foresee a decline, down from 10.3%.
Demand for capex: Nearly half (48.3%) of respondents believe demand for leases and loans to fund capital expenditures (capex) will rise in the next four months, an increase from 44.8% in October.
Access to capital: Confidence in access to capital has also improved, with 37.9% of executives predicting greater access over the next four months, compared to 27.6% in October.
Employment: Hiring intentions have seen a dramatic increase, with 44.8% of executives planning to expand their workforce, up from just 24.1% last month.
US economy: While none of the survey respondents rated the current economy as “excellent,” the majority (96.7%) evaluated it as “fair,” reflecting cautious optimism.
Economic outlook: A notable 60% of respondents believe US economic conditions will improve over the next six months, a significant jump from 37.9% in October.
Business development spending: Plans for increased spending on business development activities have risen to 36.7%, up from 34.5% last month.