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Monthly Confidence Index - Equipment Finance Industry (MCI-EFI)
October 2009
October 2009 Survey Results:
The overall Monthly Confidence Index of the Equipment Finance Industry (MCI-EFI) is 54.3, a slight increase from 53.8 in September 2009. Respondents indicate:
- When asked to assess if their current business conditions would remain the same over the next four months, 40% of executives responding said they believe business conditions will improve over the next four months, up from 25% in September. This is the greatest one month improvement in confidence since the index began in May 2009. 47.5% believe conditions will stay the same over the next four months, with 12.5% indicating they believe business conditions will worsen over the next four months.
- 70% of survey respondents believe demand for leases and loans to fund Capital Expenditures (Cap Ex) will remain the same over the next four months, up from 61.4% in September. 22.5% believe demand will increase, while 7.5% believe demand for leases and loans to fund CapEx will decrease over the next four months.
- The majority of survey respondents, 90% of executives expect the same or slightly more access to capital to fund equipment acquisitions over the next four months, down slightly from 93.1% in September.
- When asked, 27.5% of the executives reported they expect to have fewer employees in their company over the next few months, compared to 20.5%. in September. 17.5% expect to have an increase in their workforce over the next four months and 55% indicate they will have no change in workforce in the near future.
- The majority of the leadership, 62.5% continue to evaluate the current U.S. economy as "poor" which is an improvement from 72.7% who rated the economy as "poor" in September.
- A 40% of survey respondents now believe the U.S. economic conditions will get "better" over the next six months, a decrease from 54.5% of those who responded in September and 52.5 % believe the US economy will "stay the same" during the same period.
- 22.5% of respondents believe their company will increase spending on business development activities during the next six months, a slight increase of 2.5% from September, while 70% believe their will be "no change" in business development spending.
October 2009 Survey Comments from Industry Executive Leadership:
-
From the Small-ticket segment:
"Still tenuous. I believe the small ticket sector has another 12 months to go until we see the stabilization of portfolio delinquency. I expect demand to increase into 2010 but it will be another year until we see a return to confidence and a return to better levels of business production." Valerie Jester, Brandywine Capital Associates, Inc. -
From the Middle Market segment:
"As the economy recovers in 2010 and 2011 I would forecast strong demand for traditional loans and leases. The ELFA member market share of the corporate Capex spending should increase creating stronger operating results for these companies." John McQueen, Wells Fargo Equipment Finance, Inc. -
From the Large-ticket segment:
"Cautiously optimistic. There is still significant de-leveraging activity and capital preservation going on. However, there are some initial signs that capex and expenditure on equipment are turning positive." Roland Chalons-Browne, Siemens Financial Services
Survey Respondent Demographics:
Market Segment:
- Bank 37.5%
- Captive 22.5%
- Financial Services 10.0%
- Independent 30.0%
Market Segments Based on Transaction Size of New Business Volume
- Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 12.5%
- 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) 35.0%
- 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 12.5%
- $50 Million - $250 Million 20.0%
- $250 Million - $1 Billion 22.5%
- Over $1 Billion 45.0%
