Monthly Confidence Index - Equipment Finance Industry (MCI-EFI)
July 2010
July 2010 Survey Results:
The overall MCI-EFI is 57.6, a decrease from June 2010.
- When asked to assess if their current business conditions would remain the same over the next four months, 33.5% of executives responding said they believe business conditions will improve over the next four months, a significant drop from 53.5% in June. 7.5% believe conditions will get worse, and 55% believe business conditions will remain the same over the next four months.
- 30% of survey respondents, down from 41.9% in June, believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, while 60% believe demand will "remain the same" during the same four-month time period.
- 67.5% of the survey respondents indicate they expect the "same" access to capital to fund business, an increase from 58% in June. 27.5% of executives expect more access to capital to fund equipment acquisitions over the next four months, down from 39.5% in June.
- When asked, 17.5% of the executives reported they expect to hire more employees over the next four months, down significantly from 30 % in June, and 75% expect no change in headcount over the next four months.
- 100% of the leadership still evaluates the current U.S. economy as "poor" or "fair." In July, 65% rated the economy as "fair" and 35% rated the economy as "poor".
- 27.5% of survey respondents believe the U.S. economic conditions will get "better" over the next six months, down from the June responses of 41.9%. 60% of survey respondents indicate they believe the U.S. economy will "stay the same" over the next six months.
- In July, 30% compared to 34.9% of respondents in June, believe their company will increase spending on business development activities during the next six months. 60% believe there will be "no change" in business development spending.
July 2010 Survey Comments from Industry Executive Leadership:
Depending on the market segment they represent, executives have differing, but improving points of view on the current and future outlook for the industry.Bank Middle Market:
"The future for the equipment finance industry is solid. However, while we have seen modest improvement in the short term, our industry is highly dependent on the overall business activity in the U.S. marketplace, which has yet to demonstrate strong growth." Anthony Cracchiolo, US Bank
Captive Small Ticket:
"The future looks better. Pent-up demand will drive additional fundings within the next 6 to 9 months." Tony Pacchiano, ADP Commercial Leasing
Independent Middle Market:
"Liquidity remains the major issue." George Booth, Black Rock Capital
Survey Respondent Demographics:
Market Segment:
- Bank: 39.5%
- Captive: 15.8%
- Financial Services: 10.5%
- Independent: 31.6%
- Other: 2.6%
Market Segments Based on Transaction Size of New Business Volume
- Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million): 10.5%
- Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 - $5 Million): 50.0%
- Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 - $249,999): 34.2%
- Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000): 5.3%
Organization Size (Based on Annual New Business Volume for Fiscal Year 2009):
- Under $50 Million: 13.2%
- $50 Million - $250 Million: 23.7%
- $250 Million - $1 Billion: 34.2%
- Over $1 Billion: 28.9%