Monthly Confidence Index - Equipment Finance Industry (MCI-EFI)
February 2010
February 2010 Survey Results:
The overall MCI-EFI is 60.6, the highest level since the index was launched in May 2009. Respondents indicate:
- When asked to assess if their current business conditions would remain the same over the next four months, 42.9 % of executives responding said they believe business conditions will improve over the next four months. Only 2.4% believe conditions will get worse, and the majority, 54.8%, believe business conditions will remain the same over the next four months.
- 59.5% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will "remain the same" over the next four months while 31% indicated there will be an increased demand for leases or loans to fund capex, up from January's index of 20% of CEOs who believed their would be an increase in demand.
- 61.9% of the survey respondents indicate they expect the "same" access to capital to fund business, down from 67.5% in January. 38.1% of executives expect more access to capital to fund equipment acquisitions over the next four months, up from January's survey of 32.5%.
- When asked, 23.8% of the executives reported they expect to hire more employees over the next four months, up slightly from 22.5% in January, and 52.4 % expect no change in headcount over the next four months, compared to 57.5% from January 2010.
- 100% of the leadership evaluates the current U.S. economy as "poor" or "fair." In January, 59.5% rated the economy as "fair," an improvement from January when 45% rated the economy at "fair."
- 42.9% of survey respondents believe the U.S. economic conditions will get "better" over the next six months, virtually the same as the January's survey response of 42.5%. Survey respondents indicate 52.4% believe the US economy will "stay the same" and 4.8% believe it will get worse during the next six months.
- 38.1% of respondents believe their company will increase spending on business development activities during the next six months, up from 32.5% in January, while 59.5% believe their will be "no change" in business development spending.
February 2010 Survey Comments from Industry Executive Leadership:
From the Small-Ticket Sector:
Ken Collins, Susquehanna Commercial Finance: "I feel like we are in the aftermath of a major storm. It will take time to repair the infrastructure, but once the repair work is completed the reset will have taken hold and business will begin to move forward."
From the Middle-Market Sector:
Elaine Temple, Bancorp South Equipment Finance: '[I'm] cautious but optimistic, and the worst is over but the economy will still be stalled for a while."
From the Large Ticket Sector:
A large ticket MCI-EFI participant: "At this point, the outlook for the industry in 2010 appears to be just slightly better than 2009. Greater improvement would require a more focused and business-friendly effort from Washington."
Survey Respondent Demographics:
Market Segment:
- Bank 37.5%
- Captive 22.5%
- Financial Services 7.5%
- Independent 30.0%
Market Segments Based on Transaction Size of New Business Volume
- Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 12.5%
- Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 - $5 Million) 47.5%
- Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 - $249,999) 40.0%
- Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 0%
Organization Size (Based on Annual New Business Volume for Fiscal Year 2008):
- Under $50 Million 12.5%
- $50 Million - $250 Million 17.5%
- $250 Million - $1 Billion 27.5%
- Over $1 Billion 42.5%