Equipment Finance Industry Confidence Decreases Again in May
The Equipment Leasing & Finance Foundation (the Foundation) recently released the May 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 $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 40.6, a decrease from the April index of 47.0.
When asked about the outlook for the future, MCI-EFI survey respondent James D. Jenks, CEO, Global Finance and Leasing Services, LLC, said, “Until we get back to energy independence, I don’t see an uptick in the economy in the foreseeable future.”
May 2023 Survey Results:
The overall MCI-EFI is 40.6, a decrease from the April index of 47.0.
- When asked to assess their business conditions over the next four months, none of the executives responding said they believe business conditions will improve over the next four months, a decrease from 11.1% in April. 51.9% believe business conditions will remain the same over the next four months, down from 70.4% the previous month. 48.2% believe business conditions will worsen, an increase from 18.5 % in April.
- 3.6% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, unchanged from April. 53.6% believe demand will “remain the same” during the same four-month time period, a decrease from 70.4% the previous month. 42.9% believe demand will decline, up from 25.9% in April.
- 10.7% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 7.4% in April. 75% of executives indicate they expect the “same” access to capital to fund business, a decrease from 77.8% last month. 14.3% expect “less” access to capital, down from 14.8% the previous month.
- When asked, 17.9% of the executives report they expect to hire more employees over the next four months, a decrease from 33.3% in April. 67.9% expect no change in headcount over the next four months, an increase from 51.9% last month. 14.3% expect to hire fewer employees, down from 14.8% in April.
- None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from the previous month. 85.7% of the leadership evaluate the current U.S. economy as “fair,” down from 88.9% from April. 14.3% evaluate it as “poor,” an increase from 11.1% last month.
- 3.6% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 7.4% in April. 32.1% indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 48.2% last month. 64.3% believe economic conditions in the U.S. will worsen over the next six months, an increase from 44.4% the previous month.
- In May 35.7% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 37% the previous month. 53.6% believe there will be “no change” in business development spending, up from 44.4% in April. 10.7% believe there will be a decrease in spending, down from 18.5% last month.
We’d love to keep in touch! Check us out on Facebook, Twitter and LinkedIn!