Monthly Confidence Index - Equipment Finance Industry (MCI-EFI)
September 2009
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September 2009 Survey Results:
The overall Monthly Confidence Index of the Equipment Finance Industry (MCI-EFI) is 53.8, down slightly from 54.9 in August 2009. Respondents indicate:
- When asked to assess if their current business conditions would remain the same over the next four months, 25% of executives responding said they believe business conditions will improve over the next four months, down from 37.5% in August. 68.2% believe conditions will stay the same over the next four months, with 3.8% indicating they believe business conditions will worsen over the next four months.
- 61.4% of survey respondents believe demand for leases and loans to fund Capital Expenditures (Cap Ex) will remain the same over the next four months, down from 82.5% in August. 27.3% believe demand will increase, while 11.4% believe demand for leases and loans to fund CapEx will decrease over the next four months.
- The majority of survey respondents, 93.1% of executives expect the same or slightly more access to capital to fund equipment acquisitions over the next four months, down slightly from 95% in August.
- When asked, 20.5% of the executives reported they expect to have fewer employees in their company over the next few months, compared to the August response that 27.5% expected to reduce their workforce headcount over the next few months. 13.6% expect to have an increase in their workforce over the next four months and 65.9% indicate they will have no change in workforce in the near future.
- The majority of the leadership, 72.7% continue to evaluate the current U.S. economy as "poor" which is a 5.2 increase from August.
- A remarkable 54.5% of survey respondents now believe the U.S. economic conditions will get "better" over the next six months, 4.5% increase from the August survey and 36.4 % believe the US economy will "stay the same" during the same period.
- 20.5% of respondents believe their company will increase spending on business development activities during the next six months, down from 25% in August, while 72.7% believe their will be "no change" in business development spending.
September 2009 Survey Comments from Industry Executive Leadership:
From the Small-ticket segment:
"The industry will likely experience a challenging future (along the overall financial sector) over the next 1-2 years led weak growth prospects, limited access to capital and funding and excessive credit losses." Daniel Dyer, Marlin Business Services
From the Middle Market segment:
"The industry will remain challenged until the economy reaches a stabilization point. The loans and leases remain under pressure. The collateral value of the assets under lease/finance continue to decline. I don't think we have seen the bottom in equipment values." Elaine Temple, BancorpSouth Equipment Finance
From the Large-ticket segment:
"Tough sledding the rest of this and into 2010. Let's see where and how we feel by the end of the first quarter next year." David Fate, AIG Commercial Equipment Finance
Survey Respondent Demographics:
Market Segment:
- Bank 40.5%
- Captive 23.8%
- Financial Services 11.9%
- Independent 21.4%
- Other (please specify) 2.4%
Market Segments Based on Transaction Size of New Business Volume
- Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 14.3%
- Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 - $5 Million) 52.4%
- Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 - $249,999) 28.6%
- Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 4.8%
Organization Size (Based on Annual New Business Volume for Fiscal Year 2008):
- Under $50 Million 11.9%
- $50 Million - $250 Million 14.3%
- $250 Million - $1 Billion 26.2%
- Over $1 Billion 47.6%