Monthly Confidence Index - Equipment Finance Industry (MCI-EFI)
January 2010
January 2010 Survey Results:
The overall MCI-EFI is 58.7, virtually the same as the December index of 58.8. Respondents indicate:
- When asked to assess if their current business conditions would remain the same over the next four months, 42.5 % of executives responding said they believe business conditions will improve over the next four months, up from 31.1% in December. Only 2.5% believe conditions will get worse, and the majority, 55% believe business conditions will remain the same over the next four months.
- 75% of survey respondents believe demand for leases and loans to fund Capital Expenditures (Cap Ex) will "remain the same" over the next four months while 20% indicated there will be an increased demand for leases or loans to fund Cap Ex.
- 67.5% of the survey respondents indicate they expect the "same" access to capital to fund business while 32.5% of executives expect more access to capital to fund equipment acquisitions over the next four months.
- When asked, 22.5% of the executives reported they expect to hire more employees over the next four months, up from 15.6% in December, and 57.5% expect no change in headcount over the next four months.
- 100% of the leadership evaluates the current U.S. economy as "poor" or "fair." In December, 51.1% rated the economy as "fair" and in January 2010, 45% rated the economy as "fair."
- 42.5% of survey respondents believe the U.S. economic conditions will get "better" over the next six months, the same as the December number. 57.5% believe the U.S. economy will "stay the same." No one surveyed believes the economy will get worse during the next six months.
- 32.5% of respondents believe their company will increase spending on business development activities during the next six months, while 65% believe there will be "no change" in business development spending.
January 2010 Survey Comments from Industry Executive Leadership:
From the Small-Ticket Sector:
"While we forecast capital expenditures to continue to be modest, we also expect a mild uptick in 2010, largely as a result of pent up demand caused by the challenging economic conditions over the past 18-24 months. This is, of course, dependent upon continued improvement in the underlying economy." Ron Arrington, Global President, CIT Vendor Finance
From the Middle-Market Sector:
"There is a slight increase in customer demand for financings and we are seeing a more competitive pricing structure chasing that business. Capital availability is still at a cautionary stance, but strong credits are able to command low interest rates as everyone is courting them. Our sales team is seeing a higher request for quotes in the 1st Quarter already compared to last year, which is a positive turn." Aylin Cankardes, President, Rockwell Financial Group
From the Large Ticket Sector:
"In the medium and long term the outlook is good. There are fewer players today but with the anticipated increase in capital investment over the next 12 to 18 months there should be plenty of opportunities for profitable business." Roland Chalons-Browne, President Siemens Financial Services
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) 17.5%
- Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 - $5 Million) 40.0%
- 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) 2.5%
Organization Size (Based on Annual New Business Volume for Fiscal Year 2008):
- Under $50 Million 15.0%
- $50 Million - $250 Million 20.0%
- $250 Million - $1 Billion 25.0%
- Over $1 Billion 40.0%