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Equipment Leasing & Finance U.S. Economic Outlook

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Monthly Confidence Index - Equipment Finance Industry (MCI-EFI)

May 2010

May 2010 Survey Results:

The overall MCI-EFI is 67.4, a steady three month increase (60.2 for March 2010, 65.4 for April 2010).

MayWhen asked to assess if their current business conditions would remain the same over the next four months, 56 % of executives responding said they believe business conditions will improve over the next four months, a drop from 65% in April. 4.8% believe conditions will get worse, and 39% believe business conditions will remain the same over the next four months.
May53.7% of survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 47.5% in April, while 41.5% believe demand will "remain the same" during the same four month time period.
May51.2% of the survey respondents indicate they expect the "same" access to capital to fund business, down from 62.5% in April. 46.3% of executives expect more access to capital to fund equipment acquisitions over the next four months, up from 35% in April.
MayWhen asked, 37.7% of the executives reported they expect to hire more employees over the next four months, up significantly from 22.5 % in April, and 56.1% expect no change in headcount over the next four months, compared to 67.5 % from April 2010.
May100% of the leadership still evaluates the current U.S. economy as "poor" or "fair." In May, 70.7% rated the economy as "fair" and 29.3% rated the economy as "poor," an improvement from April when 65% of respondents rated the economy at "fair" and 35% rated the economy as "poor."
May51.2% of survey respondents believe the U.S. economic conditions will get "better" over the next six months, up from the April responses of 47.5%. 46.3% of survey respondents indicate they believe the US economy will "stay the same" over the next six months.
MayIn May, 39% compared to 35% of respondents in April, believe their company will increase spending on business development activities during the next six months. 60.1% believe there will be "no change" in business development spending.

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May 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
"General feeling is positive about the future of the equipment finance industry. However, short term outlook continues to look weak for capex by all segments of businesses in the U.S." Anthony V. Cracchiolo, US Bank
Independent, Middle Market
"We are seeing a positive trend in some markets but, in general, end users are still very cautious when it comes to capital spending. Lenders are equally careful and continuing to keep a very close eye on their portfolios. This is a time where relationships are more critical than ever on both sides." Aylin Cankardes, Rockwell Financial Group
Bank, Large Ticket
"We are seeing an increased level of activity. The pipeline of transactions has increased significantly in the last couple of months." CEO Large-Ticket, bank owned company.

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Survey Respondent Demographics:

Market Segment:

Bank: 39.0%
Captive: 22.0%
Financial Services: 7.3%
Independent: 29.3%
Other: 2.4%

Market Segments Based on Transaction Size of New Business Volume

Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million): 14.6%
Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 - $5 Million): 56.1%
Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 - $249,999): 26.8%
Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000): 2.4%

Organization Size (Based on Annual New Business Volume for Fiscal Year 2009):

Under $50 Million: 12.2%
$50 Million - $250 Million: 22.0%
$250 Million - $1 Billion: 29.3%
Over $1 Billion: 36.6%

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