Washington, DC, February 22, 2013 –- The Equipment Leasing & Finance Foundation (the Foundation) releases the February 2013 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. Designed to collect leadership data, the index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $725 billion equipment finance sector. Overall, confidence in the equipment finance market is up for the third consecutive month at 58.7, an increase from the January index of 54.2, reflecting industry participants’ increasing optimism despite a wary eye on economic conditions and government management of fiscal policies.
The overall MCI-EFI is 58.7, up from the January index of 54.2.
Depending on the market segment they represent, executives have differing points of view on the current and future outlook for the industry.
Independent, Small Ticket
“Demand for equipment in the small-ticket space has been very strong considering that overall economic growth is low. It's hard to see how this is sustainable. Until we see strong and consistent job growth we are expecting slower growth this year. Our outlook for credit quality continues to remain positive.” David Schaefer, President, Orion First Financial, LLC
“It appears sources are more plentiful, but the bar keeps getting raised for credit size and worthiness coupled with higher rates. There seems to be a dichotomy of credit quality to rates.” George Booth, Managing Director, Black Rock Capital, LLC
“Continuation of low interest rates, extension of bonus depreciation/Section 179, pent-up demand for replacement assets, upswing in housing and construction starts, and bullish financial markets should bode well for the equipment finance industry with similar to slightly higher growth in volume over 2012. General sentiment amongst customers and industry players is cautiously optimistic.” Russell Nelson, President, Farm Credit Leasing Services Corporation
Confidence in the U.S. economy and the capital markets is a critical driver to the equipment finance industry. Throughout history, when confidence increases, consumers and businesses are more apt to acquire more consumer goods, equipment and durables, and invest at prevailing prices. When confidence decreases, spending and risk-taking tend to fall. Investors are said to be confident when the news about the future is good and stock prices are rising.
The respondents are comprised of a wide cross section of industry executives, including large-ticket, middle-market and small-ticket banks, independents and captive equipment finance companies. The MCI-EFI uses the same pool of 50 organization leaders to respond monthly to ensure the survey’s integrity. Since the same organizations provide the data from month to month, the results constitute a consistent barometer of the industry's confidence.
How is the MCI-EFI designed?
The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:
Survey results are posted on the Foundation website, http://www.leasefoundation.org/IndRsrcs/MCI/, included in the Foundation Forecast newsletter and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that provides vision for the equipment leasing and finance industry through future-focused information and research. Primarily funded through donations, the Foundation is the only organization dedicated to future-oriented, in-depth, independent research for the leasing industry. Visit the Foundation online at www.LeaseFoundation.org and follow us on Twitter @LeaseFoundation.
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