Equipment Finance Industry Confidence Remains Steady in January at Pre-Pandemic Levels

The Equipment Leasing & Finance Foundation recently released the January 2021 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 $900 billion equipment finance sector. Overall, confidence in the equipment finance market is 59.6, unchanged from the December index and in line with pre-pandemic levels.

When asked about the outlook for the future, MCI-EFI survey respondent Michael Romanowski, president, Farm Credit Leasing, said, “As we enter a new year and a new administration, eyes will be on fiscal policy to get us through the final stretches of the pandemic. We expect business investment to increase once the path forward is clearer.”

January 2021 Survey Results:

The overall MCI-EFI is 59.6, unchanged from the December index.

  • When asked to assess their business conditions over the next four months, 33.3% of executives responding said they believe business conditions will improve over the next four months, up from 27.6% in December. 59.3% believe business conditions will remain the same over the next four months, a decrease from 62.1% the previous month. 7.4% believe business conditions will worsen, a decrease from 10.3% in December.
  • 33.3% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 27.6% in December. 59.3% believe demand will “remain the same” during the same four-month time period, an increase from 55.2% the previous month. 7.4% believe demand will decline, down from 17.2% in December.
  • 18.5% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 24.1% in December. 81.5% of executives indicate they expect the “same” access to capital to fund business, an increase from 75.9% last month. None expect “less” access to capital, unchanged from the previous month.
  • When asked, 25.9% of the executives report they expect to hire more employees over the next four months, down from 31% in December. 66.7% expect no change in headcount over the next four months, a decrease from 69% last month. 7.4% expect to hire fewer employees, up from none in December.
  • None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from the previous month. 77.8% of the leadership evaluate the current U.S. economy as “fair,” up from 72.4% in December. 22.2% evaluate it as “poor,” down from 27.6% last month.
  • 51.9% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 55.2% in December. 37% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 34.5% last month. 11.1% believe economic conditions in the U.S. will worsen over the next six months, up from 10.3% the previous month.
  • In January 22.2% of respondents indicate they believe their company will increase spending on business development activities during the next six months, a decrease from 34.5% last month. 74.1% believe there will be “no change” in business development spending, an increase from 62.1% in December. 3.7% believe there will be a decrease in spending, up slightly from 3.5% last month.

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