Equipment Finance Industry Confidence Higher in February

Washington, DC, February 22, 2024 – The Equipment Leasing & Finance Foundation (the Foundation) releases the February 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 51.7, an increase from the January index of 48.6.

When asked about the outlook for the future, MCI-EFI survey respondent Jeffry Elliott, CLFP, President, Huntington Equipment Finance, said, “We believe there is a 50/50 chance of a recession this year, which will likely result in lower capex spending on equipment, at least in the first half or until interest rates decline. However, following the significant delay in equipment acquisitions last year, we still expect considerable activity this year, as equipment wears out and replacement can be delayed only so long. The speed of onshoring and reshoring also will determine the demand for acquiring equipment or capex. Fortunately, long-term growth prospects for the United States and North America are strong, and we think the largest-ever expansion in our nation’s history is on the horizon.”

February 2024 Survey Results:
The overall MCI-EFI is 51.7, an increase from the January index of 48.6.

  • When asked to assess their business conditions over the next four months, 10.7% of the executives responding said they believe business conditions will improve over the next four months, a decrease from 20.7% in January. 82.1% believe business conditions will remain the same over the next four months, up from 62.1% the previous month. 7.1% believe business conditions will worsen, a decrease from 17.2% in
  • 7.1% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 13.8% in January. 78.6% believe demand will “remain the same” during the same four-month time period, up from 65.5% the previous month. 14.3% believe demand will decline, a decrease from 20.7% in January.
  • 14.3% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 13.8% in January. 75% of executives indicate they expect the “same” access to capital to fund business, down from 75.9% last month. 10.7% expect “less” access to capital, up slightly from 10.3% the previous month.
  • When asked, 21.4% of the executives report they expect to hire more employees over the next four months, an increase from 6.9% in 71.4% expect no change in headcount over the next four months, down from 79.3% last month. 7.1% expect to hire fewer employees, down from 13.8% in January.
  • 3.6% of the leadership evaluate the current U.S. economy as “excellent,” up from none the previous month. 89.3% of the leadership evaluate the current U.S. economy as “fair,” down from 93.1% in January. 7.1% evaluate it as “poor,” relatively unchanged from 6.9% last month.
  • 17.9% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 13.8% in January. 67.9% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 65.5% last month. 14.3% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 20.7% the previous month.
  • In February, 21.4% of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 17.2% the previous month. 67.9% believe there will be “no change” in business development spending, up from 65.5% in January. 10.7% believe there will be a decrease in spending, down from 17.2% last month.

January 2024 MCI-EFI Survey Comment from Industry Executive Leadership:

Bank, Small Ticket
“The U.S. economy is in transition and that brings opportunity to the creative and solution-oriented equipment finance and leasing companies in our industry. Our ability to pivot, meet our customers’ needs, and quickly execute on opportunities will determine our success. The headwinds of rising bankruptcy filings, delinquency and overall portfolio performance trending to long term averages are a change to the incredible times our industry has had for over a decade. This shift will affect organizations’ commitment and harm some while helping others. I look forward to growth in 2024.” David Normandin, President and Chief Executive Officer, Wintrust Specialty Finance

ABOUT THE MCI

Why an MCI-EFI?
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.

 Who participates in the MCI-EFI?
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:

  1. Current business conditions
  2. Expected product demand over the next four months
  3. Access to capital over the next four months
  4. Future employment conditions
  5. Evaluation of the current U.S. economy
  6. S. economic conditions over the next six months
  7. Business development spending expectations
  8. Open-ended question for comment

How may I access the MCI-EFI?
Survey results are posted on the Foundation website, https://www.leasefoundation.org/industry-resources/monthly-confidence-index/, included in the Foundation Forecast eNewsletter, and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.

JOIN THE CONVERSATION
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ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and student talent development programs that contribute to industry innovation, individual careers, and the advancement of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

Equipment Leasing & Finance Foundation Accepting Applications for 10 $5,000 Scholarships to Promote Careers in the Equipment Finance Industry

Washington, DC, February 5, 2024—The Equipment Leasing & Finance Foundation is accepting applications for its scholarship program for the 2024-2025 academic year. Up to 10 scholarships of $5,000 each will be awarded to full-time undergraduate or full-time graduate students interested in pursuing a career in the equipment finance industry who are majoring in business, economics, finance, or a related discipline.

This year marks five years since the launch of the Foundation scholarship program, which supports the Foundation’s mission to attract new and diverse talent to the industry. Nineteen students have received scholarships during the first four years of the program. The increase in the number of scholarships being awarded from five to 10 this year is the result of a donation from the Equipment Leasing and Finance Association (ELFA).

To be eligible for consideration for a scholarship in 2024, candidates must submit their applications online by May 10, 2024, and must:

  • Be a full-time undergraduate student, or full-time graduate student, as defined by the accredited educational institution they are attending;
  • Have declared his/her/their major course work to be in the field of business, economics, finance, or a related discipline; and
  • Have a minimum cumulative grade point average of 3.0.
  • Students with recommendations from professionals in the equipment finance industry will be given preference.

To learn more or to apply for a scholarship, visit https://www.leasefoundation.org/academic-programs/home/scholarship-program/.

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ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and student talent development programs that contribute to industry innovation, individual careers, and the advancement of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org

###

Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

 

New Foundation Study Examines the Prevention, Detection, and Impact of Fraud on the Equipment Finance Industry

Washington, DC, January 29, 2024 – Increases of 10% or more in incidents of fraud types, including identity theft and first- and third-party borrower fraud, have occurred among equipment finance companies over the last two years. A new study, Fraud in the Equipment Leasing and Finance Industry,” released by the Equipment Leasing & Finance Foundation (Foundation) analyzes fraud in the equipment leasing and finance industry with an examination of the multifaceted nature of fraud, its financial impacts, evolving challenges faced by lenders of various sizes, and solutions to address and mitigate fraud.

The study was commissioned by the Foundation and prepared by Kassem Consulting and Datos Insights. It utilizes a multipronged approach, including a survey of Equipment Leasing and Finance Association (ELFA) members, in-depth interviews with executives from varying sizes of lending institutions, and an analysis of current fraud trends.

Among the key findings of the study are

  • Fraud types and trends – The study identified various fraud types prevalent in the industry, including identity theft, use of legitimate credentials by criminal enterprises, first-party fraud by borrowing company owners, impersonation fraud, and fraudulent invoice creation, among others.
  • Financial impact – The financial toll of these frauds varies across small, medium, and large lenders. A notable percentage of respondents either do not track or are unaware of the specific financial impacts, indicating a gap in fraud management advancements and prevention.
  • Fraud detection and prevention techniques – Preventive strategies are vital to every company as they are exponentially more effective than investigative approaches. They include analyzing credit overextensions, scrutinizing bank statements, verifying state-issued documents, and employing third-party solutions for identity verification.
  • Institutional confidence and solutions – Institutions have a mixed level of confidence in their ability to manage fraud losses. Adopting advanced solutions like artificial intelligence (AI) and machine learning is seen as a future direction for more effective fraud mitigation.

“Fraud in the equipment leasing and finance industry is ever-changing, and this study is designed to help businesses meet the challenges to stay ahead of it,” said Valerie Gerard, Foundation Research Committee Chair and Co-CEO of The Alta Group. “The study reveals current fraud practices and comprehensive strategies, including types of solutions and advanced technologies companies can deploy to combat evolving fraud threats effectively.”

Download the full report at http://tinyurl.com/yn68hz6v.

All Foundation studies are available for free download from the Foundation’s online library at http://store.leasefoundation.org/.

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ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and programs that contribute to industry innovation, individual careers, and the overall betterment of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org.
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Media contact: Kelli Nienaber, knienaber@leasefoundation.org

Equipment Finance Industry Confidence Improves in January

Washington, DC, January 18, 2023 – The Equipment Leasing & Finance Foundation (the Foundation) releases the January 2024 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 48.6, an increase from the December index of 42.5.

When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, President and Chief Executive Officer, Wintrust Specialty Finance, said, “I expect that Wintrust will have a good year in the market as we have stable liquidity, attractive cost of funds, and an engaged and motivated team. I expect to continue to see challenges in the overall economy as well as specific segments, and we are diversified and nimble to move to the opportunity. The leasing industry has historically performed better than other asset classes through tougher times because of the nimble and creative nature of the industry. I expect that the industry will come through this next couple years stronger having learned from our experiences.”

 January 2024 Survey Results:
The overall MCI-EFI is 48.6, an increase from the December index of 42.5.

  • When asked to assess their business conditions over the next four months, 20.7% of the executives responding said they believe business conditions will improve over the next four months, an increase from 3.7% in December. 62.1% believe business conditions will remain the same over the next four months, down from 66.7% the previous month. 17.2% believe business conditions will worsen, a decrease from 29.6% in
  • 13.8% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 3.7% in December. 65.5% believe demand will “remain the same” during the same four-month time period, down from 74.1% the previous month. 20.7% believe demand will decline, a decrease from 22.2% in December.
  • 13.8% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 3.7% in December. 75.9% of executives indicate they expect the “same” access to capital to fund business, up from 74.1% last month. 10.3% expect “less” access to capital, down from 22.2% the previous month.
  • When asked, 6.9% of the executives report they expect to hire more employees over the next four months, a decrease from 18.5% in December. 79.3% expect no change in headcount over the next four months, up from 63% last month. 13.8% expect to hire fewer employees, down from 18.5% in December.
  • None of the leadership evaluate the current U.S. economy as “excellent,” unchanged from the previous month. 93.1% of the leadership evaluate the current U.S. economy as “fair,” up from 85.2% in December. 6.9% evaluate it as “poor,” down from 14.8% last month.
  • 13.8% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, up from 3.7% in December. 65.5% indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 66.7% last month. 20.7% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 29.6% the previous month.
  • In January, 17.2% of respondents indicate they believe their company will increase spending on business development activities during the next six months, an increase from 14.8% the previous month. 65.5% believe there will be “no change” in business development spending, down from 66.7% in December. 17.2% believe there will be a decrease in spending, down from 18.5% last month.

January 2024 MCI-EFI Survey Comment from Industry Executive Leadership:

Captive, Small Ticket
“We still see demand for light and medium-duty trucks to satisfy ever-growing e-commerce business. We also see thousands of light and medium-duty trucks waiting for bodies to be upfitted. When the body companies catch up with chassis awaiting upfitting, we will see a lot of opportunities for equipment finance companies in this sector over the next three to six months.” Jim DeFrank, EVP and Chief Operating Officer, Isuzu Finance of America, Inc.

ABOUT THE MCI

Why an MCI-EFI?
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.

Who participates in the MCI-EFI?
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:

  1. Current business conditions
  2. Expected product demand over the next four months
  3. Access to capital over the next four months
  4. Future employment conditions
  5. Evaluation of the current U.S. economy
  6. S. economic conditions over the next six months
  7. Business development spending expectations
  8. Open-ended question for comment

How may I access the MCI-EFI?
Survey results are posted on the Foundation website, https://www.leasefoundation.org/industry-resources/monthly-confidence-index/, included in the Foundation Forecast eNewsletter, and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.

JOIN THE CONVERSATION
X: https://twitter.com/LeaseFoundation
LinkedIn: https://www.linkedin.com/company/10989281/
Vimeo: https://vimeo.com/elffchannel

ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and student talent development programs that contribute to industry innovation, individual careers, and the advancement of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org

###

Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

2024 Equipment Leasing & Finance Industry Snapshot Now Available

The Equipment Leasing & Finance Foundation has released the 2024 Equipment Leasing & Finance Industry Snapshot, an indispensable information resource for industry participants. Designed for use in executive briefings and presentations, the presentation slide deck summarizes the current conditions and projections for the U.S. economy and equipment finance industry with clear, easy-to-digest charts and short narratives of key trends.

Among the wide range of details in the 2024 Snapshot:

  • The Foundation projects that the U.S. economy will grow by 1.7%.
    • The U.S. economy had a remarkably strong Q3 2023 of 5.2% SAAR growth, with consumer and government spending boosting growth and investment, while the labor market remained strong.
    • Robust economic growth was paired with a steady decline in inflation.
  • Economic tailwinds include:
    • In Q3, consumer spending expanded 3.6% annualized, government spending grew solidly driven by an 8.2% annualized federal defense spending, and residential investment grew 6.2% annualized.
  • Special topics highlighted in the snapshot include consumer financial stress, the labor market, global conflicts and their impact on energy prices and U.S. businesses, weak global demand, the housing market and manufacturing sector.
  • Equipment and software investment is expected to grow at a 2.2% pace in 2024.
    • E&S investment was sluggish in Q3, rising 0.5% (annualized) after 7.0% growth in Q2.
    • Elevated interest rates will continue to drag on investment in 2024, and the climate for near-term investment is still relatively weak.
  • New business volume growth reported in ELFA’s Monthly Leasing and Finance Index was up 0.7% year to date in October, currently trailing the rate of inflation. After strong growth in early 2023, year-to-date new business volume growth softened in Q2 and Q3 in the face of interest rates and tightening lending standards.

Prepared by Keybridge Research and updated quarterly, the snapshot is available for free download at https://www.leasefoundation.org/industry-resources/industry-snapshot/

Media contact: Kelli Nienaber, knienaber@leasefoundation.org

Equipment Finance Industry Confidence Steady in December

Washington, DC, December 20, 2023 – The Equipment Leasing & Finance Foundation (the Foundation) releases the December 2023 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 42.5, steady with the November index of 42.8.

When asked about the outlook for the future, MCI-EFI survey respondent Dave B. Fate, CEO, Stonebriar Commercial Finance, said, “In the most recent survey, most opined that the markets would remain steady through early 2024 with very few signs anticipating dramatic changes in the next several months. Subsequent economic reports over the past two weeks, including the Fed’s announcement that further rate hikes are no longer forecasted, with various institutions predicting multiple rate cuts throughout 2024, the first of which some predict as early as March–have caused major positive shifts in sentiment in the bond and equity markets the past two weeks. Equity markets have rallied to all-time highs, mortgage rates dropped below 7%, and overall market sentiment has improved significantly, which I expect will continue in the coming months.”

December 2023 Survey Results:
The overall MCI-EFI is 42.5, relatively unchanged from the November index of 42.8.

  • When asked to assess their business conditions over the next four months, 3.7% of the executives responding said they believe business conditions will improve over the next four months, an increase from none in November. 66.7% believe business conditions will remain the same over the next four months, down from 74.1% the previous month. 29.6% believe business conditions will worsen, an increase from 25.9% in November.
  • 3.7% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from none in November. 74.1% believe demand will “remain the same” during the same four-month time period, unchanged from the previous month. 22.2% believe demand will decline, a decrease from 25.9% in November.
  • 3.7% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 11.1% in November. 74.1% of executives indicate they expect the “same” access to capital to fund business, unchanged from last month. 22.2% expect “less” access to capital, up from 14.8% the previous month.
  • When asked, 18.5% of the executives report they expect to hire more employees over the next four months, an increase from 14.8% in November. 63% expect no change in headcount over the next four months, down from 77.8% last month. 18.5% expect to hire fewer employees, up from 7.4% in November.
  • None of the leadership evaluate the current U.S. economy as “excellent,” a decrease from 3.7% the previous month. 85.2% of the leadership evaluate the current U.S. economy as “fair,” up from 81.5% in November. 14.8% evaluate it as “poor,” unchanged from last month.
  • 3.7% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, unchanged from November. 66.7% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 44.4% last month. 29.6% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 51.9% the previous month.
  • In December, 14.8% of respondents indicate they believe their company will increase spending on business development activities during the next six months, unchanged from the previous month. 66.7% believe there will be “no change” in business development spending, down from 70.4% in November. 18.5% believe there will be a decrease in spending, an increase from 14.8% last month.

December 2023 MCI-EFI Survey Comments from Industry Executive Leadership:

Bank, Small Ticket
“Repeat business from existing customers remains strong. While other lenders have pulled back for various reasons, our program has remained consistent without major changes to credit requirements. However, we are seeing some of the fallout from increased equipment values that were a result of low inventory in 2020-2021.” Charles Jones, Senior Vice President, 1st Equipment Finance (FNCB Bank)

Independent, Small Ticket
“Looking out to 2024, we expect sales of equipment and transportation to be softer.” James D. Jenks, CEO, Global Finance and Leasing Services, LLC

ABOUT THE MCI

Why an MCI-EFI?
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.

Who participates in the MCI-EFI?
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:

  1. Current business conditions
  2. Expected product demand over the next four months
  3. Access to capital over the next four months
  4. Future employment conditions
  5. Evaluation of the current U.S. economy
  6. S. economic conditions over the next six months
  7. Business development spending expectations
  8. Open-ended question for comment

How may I access the MCI-EFI?
Survey results are posted on the Foundation website, https://www.leasefoundation.org/industry-resources/monthly-confidence-index/, included in the Foundation Forecast eNewsletter, and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.

JOIN THE CONVERSATION
Twitter: https://twitter.com/LeaseFoundation
LinkedIn: https://www.linkedin.com/company/10989281/
Vimeo: https://vimeo.com/elffchannel

 ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and student talent development programs that contribute to industry innovation, individual careers, and the advancement of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org

###

Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

2024 Economic Outlook Forecasts 2.2% Expansion in Equipment and Software Investment, 1.7% GDP Growth

Washington, DC, December 20, 2023 – The U.S. economy likely averted a recession in 2023 and appears to be on track for a “soft landing” in 2024, according to the 2024 Equipment Leasing & Finance U.S. Economic Outlook.  Real equipment and software investment growth is projected to be 2.2% next year — slightly slower than the growth rate experienced over the last 12 months — with stronger investment activity expected in the latter half of the year. The report, which was prepared by Keybridge and released today by the Equipment Leasing & Finance Foundation, also forecasts real GDP growth to be 1.7% in 2024, down from an estimated 2.4% in 2023.

The Foundation’s report is focused on the $1.16 trillion equipment leasing and finance industry and highlights key trends in equipment investment, placing them in the context of the broader U.S. economic climate.

Zack Marsh, CLFP, Foundation Chair and SVP, Accounting and Analysis, AP Equipment Financing, said, “The Foundation’s annual outlook demonstrates that the economy has thus far managed to ‘thread the needle’ by maintaining solid growth in the face of higher interest rates while inflation returns to more acceptable levels. However, it also reveals that we’re not out of the woods yet, and a recession is still possible during the first half of the year. Overall, while breakout growth in equipment and software investment looks unlikely in 2024, the prospect of lower interest rates and acceptable inflation levels should keep the industry on sound footing.”

Highlights from the 2024 Outlook include:

  • Equipment and software investment growth expanded at a sluggish 0.5% rate (annualized) in Q3 after growing 7.0% annualized in the previous quarter. Elevated interest rates will continue to drag on investment in 2024, and the climate for near-term investment is still relatively weak. The Foundation expects modest growth in Q4 and the first half of 2024, but anticipates a pick-up in investment activity during the second half of the year.
  • The U.S. economy likely averted a recession in 2023, expanding a robust 5.2% annualized in Q3 as the labor market proved surprisingly resilient to higher interest rates and consumers continued to spend. Inflation has been brought to more acceptable levels without triggering widespread job loss, and the combination of a healthy labor market, cooling inflation, and improved consumer sentiment make a “soft landing” scenario increasingly likely. Still, it is premature to declare victory: high government expenditures contributed much more to GDP in 2023 than they will in 2024, consumer spending may soften amid rising financial stress, and global economic conditions remain weak.
  • The manufacturing sector stagnated in 2023, and many of the same challenges U.S. manufacturers faced are likely to persist in 2024. High interest rates continue to weigh on capex plans, the U.S. economy is unlikely to experience the same pace of growth, and global demand also appears to be soft. However, a continued influx of federal dollars should boost some industries, including semiconductors and clean energy.
  • Main Street businesses have benefitted from strong consumer spending over the last two years, outperforming expectations. However, small business owners are increasingly pessimistic about near-term sales revenue and concerns that consumers may be finally starting to pull back.
  • The Federal Reserve held interest rates steady at its most recent meeting, with rates at 5.25–5.5%. Inflation has fallen significantly over the last six months, and if economic growth weakens significantly in late 2023 and early 2024 as expected, Fed officials may feel pressure to begin cutting rates in the spring, particularly if inflation remains in the 3% range.

The Foundation-Keybridge U.S. Equipment & Software Investment Momentum Monitor, which is released in conjunction with the Economic Outlook, tracks 12 equipment and software investment verticals. In addition, the Momentum Monitor Sector Matrix provides a customized data visualization of current values of each of the 12 verticals based on recent momentum and historical strength. This month four verticals are expanding, none are peaking, five are recovering, and three are weakening. Over the next three to six months the Foundation expects the following trends to materialize on a year-over-year basis:

  • Agriculture machinery investment growth should return to positive territory.
  • Construction machinery investment growth is likely to remain positive.
  • Materials handling equipment investment growth should improve.
  • All other industrial equipment investment growth will likely weaken.
  • Medical equipment investment growth will likely remain subdued, though recent movement in the Index is encouraging.
  • Mining and oilfield machinery investment growth will likely remain weak or negative.
  • Aircraft investment growth will likely remain positive.
  • Ships and boats investment growth will likely strengthen.
  • Railroad equipment investment growth will likely remain modestly positive.
  • Trucks investment growth may slow but should remain positive.
  • Computers investment growth should improve.
  • Software investment growth will likely remain solid.

The Foundation produces the Equipment Leasing & Finance U.S. Economic Outlook report in partnership with economic and public policy consulting firm Keybridge Research. The annual economic forecast provides the U.S. macroeconomic outlook, credit market conditions, and key economic indicators. The report will be updated quarterly throughout 2024.

Download the full report at https://www.leasefoundation.org/industry-resources/u-s-economic-outlook/.

Download the Momentum Monitor at https://www.leasefoundation.org/industry-resources/momentum-monitor/.

All Foundation studies are available for free download from the Foundation’s online library at http://store.leasefoundation.org/.

JOIN THE CONVERSATION
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ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and student talent development programs that contribute to industry innovation, individual careers, and the advancement of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org.

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

Equipment Leasing & Finance Foundation Elects Officers, Welcomes New Trustees, and Presents Research Award During Annual Meeting

Washington, DC, December 5, 2023 – The Equipment Leasing & Finance Foundation (Foundation) announced the 2024 officers of its Board of Trustees (Board). Board Officers serving are Zack Marsh, CLFP, SVP, Accounting and Analysis, AP Equipment Financing as Chair; Miles Herman, CEO, LEAF Commercial Capital, Inc. as Vice Chair; Peter Bullen, Group Head, Key Equipment Finance as Secretary/Treasurer; and Leigh Lytle, President and CEO, Equipment Leasing and Finance Association (ELFA) as President. Nancy Pistorio, CLFP, President, Madison Capital LLC is Immediate Past Chair. The officer elections were held during the Board‘s annual meeting.

New members appointed to the Foundation Board of Trustees include Jim DeFrank, EVP and Chief Operating Officer, Isuzu Finance of America, Inc.; Jeffrey Dicosola, Sales Manager, Great American Insurance Group; Martin Klotzman, Director of Marketing and Operations, Ivory Consulting Corporation; and Brittany Ogden, Attorney, Partner, Quarles & Brady LLP.

“The Foundation’s 2024 Board brings a wealth of leadership and industry experience to their roles as Trustees,” said Zack Marsh. “We are privileged to have such talent, commitment and expertise serving the Foundation and its mission for the advancement of the equipment finance industry.”

Trustees continuing on the Board for 2024 are:

  • Andrew Blacklock, Vice President, Strategy and Business Operations, Cisco Systems Capital Corporation
  • Cindy Fleck, Senior Vice President and General Manager Equipment Finance, Channel
  • Valerie Gerard, Co-Chief Executive Officer, The Alta Group LLC
  • Shari Lipski, CLFP, Principal, ECS Financial Services, Inc.
  • Mark Loken, Vice President, Credit, Farm Credit Leasing
  • David Normandin, CLFP, President and CEO, Wintrust Specialty Finance
  • Ricardo E. Rios, CLFP, COO, Commercial Equipment Finance, Inc.
  • Nancy Robles, President, Eastern Funding LLC
  • William Tefft, SVP Equipment Management, Banc of California
  • Donna Yanuzzi, SVP Director, 1st Equipment Finance, Inc. (FNCB Bank)

Kelli Nienaber will continue to serve as Executive Director.

Steven R. LeBarron Award
Research Committee Chair Thomas Ware honored Valerie Gerard with the Steven R. LeBarron Award for Principled Research. A member of the Foundation Research Committee (FRC) and a Foundation Trustee since 2018, Gerard also serves on the Editorial Review Board for the Journal of Equipment Lease Financing (JELF) and the Nominating Committee. She is being recognized for her work on content development for the Foundation podcast, which is growing as a channel to share Foundation content, including hosting study researchers as guests to share their expertise and insights. Gerard will take the lead as Chair of the FRC in 2024. This award is presented annually in memory of Steven LeBarron to the FRC member who demonstrates the insight, fortitude, and dedication he exemplified.

JOIN THE CONVERSATION
Twitter: https://twitter.com/LeaseFoundation
LinkedIn: https://www.linkedin.com/company/10989281/
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ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and student talent development programs that contribute to industry innovation, individual careers, and the advancement of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org.

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

Equipment Finance Industry Confidence Steady in November

Washington, DC, November 16, 2023 – The Equipment Leasing & Finance Foundation (the Foundation) releases the November 2023 Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) today. The index reports a qualitative assessment of both the prevailing business conditions and expectations for the future as reported by key executives from the $1 trillion equipment finance sector. Overall, confidence in the equipment finance market is 42.8, an increase from the October index of 40.1.

11When asked about the outlook for the future, MCI-EFI survey respondent Sean Duffy, CFO of Global Financial & Leasing Services, LLC, said, “The depth of geopolitical uncertainty, and our own domestic political uncertainty, will have a significant impact on how the economy and our industry fare over the next 6-12 months.”

November 2023 Survey Results:
The overall MCI-EFI is 42.8, an increase from the October index of 40.1.

  • When asked to assess their business conditions over the next four months, none of the executives responding said they believe business conditions will improve over the next four months, a decrease from 3.7% in October. 74.1% believe business conditions will remain the same over the next four months, unchanged from the previous month. 25.9% believe business conditions will worsen, an increase from 22.2% in October.
  • None of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 3.7% in October. 74.1% believe demand will “remain the same” during the same four-month time period, a decrease from 77.8% the previous month. 25.9% believe demand will decline, an increase from 18.5% in October.
  • 11.1% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 14.8% in October. 74.1% of executives indicate they expect the “same” access to capital to fund business, up from 70.4% last month. 14.8% expect “less” access to capital, unchanged from the previous month.
  • When asked, 14.8% of the executives report they expect to hire more employees over the next four months, unchanged from October. 77.8% expect no change in headcount over the next four months, up from 70.4% last month. 7.4% expect to hire fewer employees, down from 14.8% in October.
  • 3.7% of the leadership evaluate the current U.S. economy as “excellent,” an increase from none the previous month. 81.5% of the leadership evaluate the current U.S. economy as “fair,” down from 92.6% in October. 14.8% evaluate it as “poor,” up from 7.4% last month.
  • 3.7% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, relatively unchanged from 3.9% in October. 44.4% indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 57.7% last month. 51.9% believe economic conditions in the U.S. will worsen over the next six months, an increase from 38.5% the previous month.
  • In November, 14.8% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 11.1% the previous month. 70.4% believe there will be “no change” in business development spending, down from 77.8% in October. 14.8% believe there will be a decrease in spending, an increase from 11.1% last month.

November 2023 MCI-EFI Survey Comments from Industry Executive Leadership:

Bank, Small Ticket
“As the equipment leasing and finance industry heads to the end of year there will continue to be demand for financing, and the organizations with liquidity will have solid new originations. Portfolios continue to perform in most sectors at strong historic rates. I think we are heading into a slowdown in 2024, and rates will fall during this slowdown, but for now there is opportunity.” David Normandin, President and Chief Executive Officer, Wintrust Specialty Finance

Bank, Middle Ticket
“Customers seem to be getting accustomed to the current interest rate environment and the idea that rates may not be coming down for a while. This, combined with the continued draw-down of cash reserves, could lead to increased lease demand going forward, but we will need to keep a closer eye on repayment capacity.” Jason Lueders, President, Farm Credit Leasing

ABOUT THE MCI

Why an MCI-EFI?
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.

Who participates in the MCI-EFI?
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:

  1. Current business conditions
  2. Expected product demand over the next four months
  3. Access to capital over the next four months
  4. Future employment conditions
  5. Evaluation of the current U.S. economy
  6. S. economic conditions over the next six months
  7. Business development spending expectations
  8. Open-ended question for comment

How may I access the MCI-EFI?
Survey results are posted on the Foundation website, https://www.leasefoundation.org/industry-resources/monthly-confidence-index/, included in the Foundation Forecast eNewsletter, and included in press releases. Survey respondent demographics and additional information about the MCI are also available at the link above.

JOIN THE CONVERSATION
Twitter: https://twitter.com/LeaseFoundation
LinkedIn: https://www.linkedin.com/company/10989281/
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ABOUT THE FOUNDATION
The Equipment Leasing & Finance Foundation is a 501c3 non-profit organization that propels the equipment finance sector—and its people—forward through industry-specific knowledge, intelligence, and student talent development programs that contribute to industry innovation, individual careers, and the advancement of the equipment leasing and finance industry. The Foundation is funded through charitable individual and corporate donations. Learn more at www.leasefoundation.org

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Media Contact: Kelli Nienaber, knienaber@leasefoundation.org

Q4 2023 Equipment Leasing & Finance Industry Snapshot now available

The Equipment Leasing & Finance Foundation has released the Q4 2023 Equipment Leasing & Finance Industry Snapshot, an indispensable information resource for industry participants. Designed for use in executive briefings and presentations, the presentation slide deck summarizes the current conditions and projections for the U.S. economy and equipment finance industry with clear, easy-to-digest charts and short narratives of key trends.

Among the range of details in the Q4 Snapshot:

  • The Foundation projects that the U.S. economy will grow by 2.3% annualized in 2023.
    • The U.S. economy expanded at a 2.1% annualized rate in Q2, the fourth consecutive quarter of solid economic growth.
    • Growth in Q2 was broad-based, fueled by consumer and government spending, and business investment.
  • Economic tailwinds for growth in 2023 include:
    • The labor market, which remains a pillar of strength adding over 2.3 million jobs in 2023 as of September.
    • Consumer spending, which remains a crucial driver of economic growth.
      • Retail sales growth was higher than expected over the summer with strong spending at e-tailers, sporting goods stores, and restaurants and bars, usually the first areas where consumers pull back.
      • Despite rising debt levels, consumers kept the U.S. economic engine turning during Q2 and Q3 2023.
  • Economic headwinds include:
    • Consumer debt as growing concerns persist for deteriorating consumer financial health.
    • A global economic slowdown with Eurozone countries facing headwinds and global inflation, falling prices in China raising concerns of a “deflationary trap,” and flagging global demand potentially reducing U.S. exports and business investment.
    • Inflation, which eased significantly since last year, but is still above the Fed’s target.
    • Oil price fluctuations posing a challenge as the Fed tries to control inflation.
    • Labor strike activity, including the United Auto Workers strike, one of nine strikes in August involving more than 1,000 workers.
  • Equipment and software investment is expected to grow at a 3.0% pace in 2023.
    • E&S investment growth was strong in Q2, but early indications suggest that investment may weaken in Q3 and Q4 as credit availability has continued to tighten.
  • New business volume growth reported in ELFA’s Monthly Leasing and Finance Index was up 2.8% year to date in August, a deceleration from August 2022 when year-to-date growth was 5.0%.
    • After strong growth in early 2023, YTD new business volume growth softened in Q2 and Q3 in the face of interest rates and tightening lending standards.

Prepared by Keybridge Research and updated quarterly, the snapshot is available for free download at https://www.leasefoundation.org/industry-resources/industry-snapshot/

Media contact: Kelli Nienaber, knienaber@leasefoundation.org