The Equipment Leasing & Finance Foundation has released the July 2012 Monthly Confidence Index for the Equipment Finance Industry. Designed to collect leadership data, the index reports a qualitative assessment of both the prevailing business conditions and expectations, as reported by key executives from the $628 billion equipment finance sector. Overall, confidence in the equipment finance market is 51.5, up from the June index of 48.5, but reflects some continuing concern over economic factors, as well as regulatory and political uncertainty.
When asked about the outlook for the future, MCI survey respondent Russell D. Nelson, President, Farm Credit Leasing Services Corporation, said, “Continued volatility/uncertainty at home and abroad may inhibit planned/needed capital expenditures during the next six months, but low interest rates and tax incentives will enable our industry to generate modest increases in asset volume and profitability through the remainder of 2012.” He added, “Improving credit quality, stable earnings, and demand for innovative/creative lease and loan products should position our industry for improved growth in 2013 and beyond.
When asked to assess their business conditions over the next four months, 6.5 percent of executives responding said they believe business conditions will improve over the next four months, down from 8.1percent in June. Additionally, 71 percent of respondents believe business conditions will remain the same over the next four months, up from 64.9 percent in June, and 22.6 percent believe business conditions will worsen, down from 27 percent the previous month. Other findings include:
- 12.9 percent of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, an increase from 8.1 percent in June.
- 16.1 percent believe demand will decline, down from 27 percent in June.
- 19.4 percent of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 10.8 percent in June.
- 77.4 percent of respondents indicate they expect the same access to capital to fund business, a decrease from 86.5 percent the previous month. 3.2 percent expect less access to capital, up from 2.7 percent who expected less access in June.
- 71 percent of the leadership evaluates the current U.S. economy as “fair,” down from 78.4 percent last month, while 29 percent rate it as “poor,” up from 21.6 percent in June.
- 9.7 percent believe that U.S. economic conditions will get better over the next six months, up from 8.1 percent in June.
- 71 percent of survey respondents indicate they believe the U.S. economy will stay the same over the next six months, up from 64.9 percent in June.
- 19.4 percent believe economic conditions in the U.S. will worsen over the next six months, a decrease from 27 percent who believed so last month.