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Monthly Confidence Index - Equipment Finance Industry (MCI-EFI)
November 2009
November 2009 Survey Results:
The overall Monthly Confidence Index of the Equipment Finance Industry (MCI-EFI) is 57.2, an increase from 54.3 in October 2009. Respondents indicate:
- When asked to assess if their current business conditions would remain the same over the next four months, 39.5 % of executives responding said they believe business conditions will improve over the next four months. However, only 4.7% believe conditions will get worse, an improvement from 12.5% in October. 55.8% believe business conditions will remain the same over the next four months compared to 47.5% in October.
- 65% of survey respondents believe demand for leases and loans to fund Capital Expenditures (Cap Ex) will remain the same over the next four months. 27.9% indicated there will be an increased demand for leases or loans to fund Cap Ex over the next four months, an increase from 22.5% in October.
- The majority of survey respondents, 97.7% of executives expect the same or slightly more access to capital to fund equipment acquisitions over the next four months, up from 90% in October.
- When asked, 25.60% of the executives reported they expect to hire more employees over the next four months, up from 17.5% in October, and 48.8% expect no change in headcount.
- 100% of the leadership evaluates the current U.S. economy as "poor" or "fair."
- 37% of survey respondents believe the U.S. economic conditions will get "better" over the next six months, a decrease from 40% of those who responded the same in October. 51% believe the US economy will "stay the same" and 11.6% believe the economy will get worse during the same period.
- 30% of respondents believe their company will increase spending on business development activities during the next six months, an increase from 22.5% in October, while 62.8% believe their will be "no change" in business development spending.
October 2009 Survey Comments from Industry Executive Leadership:
-
From the Bank segment:
"There are signs that, while limited, a small level of liquidity is beginning to return to the market. We expect the 2nd half of 2010 to show measurable improvement." Adam Warner, Key Equipment Finance -
From the Independent segment:
"Still very tenuous. It is very difficult to match the marketplace's needs with the lending abilities of our banks. The worlds are very far apart at the moment." Valerie Jester, Brandywine Capital Associates -
From the Captive segment:
"As we begin to climb out of this prolonged business cycle I am cautiously optimistic about our industry's future. For most, we have weathered the brunt of the storm. The frozen capital markets are thawing, 3Q09 US GDP was positive, and the sun may be peaking over the horizon on equipment spending. Now more than ever, we have an opportunity to fulfill our customer's demand for competitive financing solutions and extraordinary service levels." Bill Houston, Canon Financial Services
Survey Respondent Demographics:
Market Segment:
- Bank 31.0%
- Captive 28.6%
- Financial Services 7.1%
- Independent 31.0%
Market Segments Based on Transaction Size of New Business Volume
- Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 16.7%
- Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 - $5 Million) 42.9%
- Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 - $249,999) 38.1%
- Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 2.4%
Organization Size (Based on Annual New Business Volume for Fiscal Year 2008):
- Under $50 Million 14.3%
- $50 Million - $250 Million 11.9%
- $250 Million - $1 Billion 33.3%
- Over $1 Billion 40.5%
