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Independent, non-profit Foundation studying markets, trends and operations to illuminate the future of the equipment finance industry.

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Industry Future Council Report 2010

Monthly Confidence Index Shows Increase for the Third Month in a Row

Posted 01/20/10

The Foundation’s Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) has provided a good barometer for the equipment finance industry and its level of optimism (or pessimism). December brought more good news with an increase in confidence – the third month in a row. The overall confidence number is 58.8 for December 2009, an increase from 57.2 in November 2009.

"After over 18 months of market turmoil, we are beginning to see signs of stabilization and, in some areas around portfolio quality; we are witnessing modest improvements and positive trends," reported Adam Warner, Key Equipment Finance during the MCI-EFI survey.

But industry members are also tempering their enthusiasm with some realities. Said George Booth, Black Rock Capital, LLC, "[I am] still very concerned about liquidity. Demand seems to be picking up slightly but funding is still very tight."

Additionally, Rob Stowers, Altec Capital, added, “"2010 will be better than 2009, but we will see more companies fail or cease to exist in their current form."

Respondents also indicated:

  • When asked to assess if their current business conditions would remain the same over the next four months, 31.1 percent of executives responding said they believe business conditions will improve over the next four months. Only 2.2 percent believe conditions will get worse, and the majority 66.7 percent believe business conditions will remain the same over the next four months compared to 55.8 percent in November.
  • 66.7 percent of survey respondents believe demand for leases and loans to fund Capital Expenditures (Cap Ex) will "remain the same" over the next four months and 26.7 percent indicated there will be an increased demand for leases or loans to fund Cap Ex.
  • The majority of survey respondents, 95.6 percent of executives expect the same or slightly more access to capital to fund equipment acquisitions over the next four months, down slightly from 97.7 percent in November.
To summarize the last few months of the MCI-EFI, the index reported an overall confidence index accordingly:
  • 58.8 -- December
  • 57.2 -- November
  • 54.3 -- October
  • 53.8 – September

The MCI-EFI provides a qualitative assessment of both the prevailing business conditions and expectations for the future, as reported by key executives from the $650 billion equipment finance sector. To view more information about the MCI-EFI, results from the December survey and to view a chart depicting all month’s activities, visit the MCI-EFI page on the Foundation web site.