Monthly Confidence Index - Equipment Finance Industry (MCI-EFI)
May 2009 Survey Results:
The overall Monthly Confidence Index of the Equipment Finance Industry (MCI-EFI) is 49.20 using a 100 point scale. For the purposes of this index, a score of 50 is considered as being "no change" in confidence from the prior month. Respondents indicate:
- 44.7% of the executives responding believe their business conditions will remain the same over then next four months and 36.2% believe business conditions will get better over the same time period.
- The majority (53.2%) believe demand for leases and loans to fund Capital Expenditures (Cap Ex) also will remain the same over the next four months.
- One-third (31.9%) of the equipment finance leadership believe they will have more access to capital to fund equipment acquisitions over the next four months while 57% believe their access to capital will remain the same over the same time period.
- When asked, 59.6% of executives reported they expect no change in their workforce headcount over the next few months, however, 27.7% still expect to have employee layoffs over the same time period.
- An overwhelming 85% rated the current U.S. economy as "poor" and remaining 15% as "fair." However, 83% believe the U.S. economy will stay the same or get better over the next six months.
- Lastly, the majority of executives (66%) believe they will have no change in their spending on business development activities over the next six months.
May 2009 Survey Comments from Industry Executive Leadership:
“There is a clear need for the equipment finance product the industry provides. Equipment financing expertise and capital will always be needed. The demand for that expertise through at least mid 2010 will be low. When the capital expenditure part of the economy begins to pick up so will our industry.”
Harry Kaplun, President, Frost Leasing
“I do not expect activity levels to pick up in any meaningful way in 2009. I am confident, though, that the demand for capital/equipment financing will be critical to businesses that must acquire equipment. For overall financing activity, this will partially offset the slower equipment sales being reported by manufacturers.”
Adam Warner, President, Key Equipment Finance
“Short term, I believe we will continue to feel pressure as capex demands remain weak well into the second half of 2009. As we move through 2010, I believe the combination of business right-sizing and purging of bad debts by financial institutions combined with an uptick in both consumer and commercial spending will translate into a steady recovery for the equipment leasing and finance industry. The fundamental reasons why our customers use equipment financing will remain over the long-term, however, we should expect the landscape of competitors to significantly evolve over the next 2+ years.”
James J Ambrose, President, Equipment Finance, GE Healthcare Finance Services
