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Equipment Finance Industry Confidence Steady in October

Washington, DC, October 21, 2021 – The Equipment Leasing & Finance Foundation (the Foundation) releases the October 2021 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 $900 billion equipment finance sector. Overall, confidence in the equipment finance market is 61.1, an increase from the September index of 60.5.

When asked about the outlook for the future, MCI-EFI survey respondent David Normandin, CLFP, President and CEO, Wintrust Specialty Finance, said, “Business volume is increasing coming out of the summer months, portfolio performance is sound, and we are optimistic for a solid Q4 2021.”

October 2021 Survey Results:
The overall MCI-EFI is 61.1, an increase from the September index of 60.5.

When asked to assess their business conditions over the next four months, 25.9% of executives responding said they believe business conditions will improve over the next four months, up from 17.9% in September. 70.4% believe business conditions will remain the same over the next four months, down from 71.4% the previous month. 3.7% believe business conditions will worsen, down from 10.7% in September.
22.2% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 21.4% in September. 74.1% believe demand will “remain the same” during the same four-month time period, a decrease from 75% the previous month. 3.7% believe demand will decline, up from none in September.
14.8% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 32.1% in September. 85.2% of executives indicate they expect the “same” access to capital to fund business, an increase from 67.9% last month. None expect “less” access to capital, unchanged from the previous month.
When asked, 40.7% of the executives report they expect to hire more employees over the next four months, up from 28.6% in September. 59.3% expect no change in headcount over the next four months, a decrease from 71.4% last month. None expect to hire fewer employees, unchanged from September.
7.4% of the leadership evaluate the current U.S. economy as “excellent,” a slight increase from 7.1% the previous month. 81.5% of the leadership evaluate the current U.S. economy as “fair,” down from 92.9% in September. 11.1% evaluate it as “poor,” up from none last month.
22.2% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 17.9% in September. 63% indicate they believe the U.S. economy will “stay the same” over the next six months, a decrease from 64.3% from last month. 14.8% believe economic conditions in the U.S. will worsen over the next six months, down from 17.9% the previous month.
In October 42.9% of respondents indicate they believe their company will increase spending on business development activities during the next six months, 57.1% believe there will be “no change” in business development spending, and none believe there will be a decrease in spending, all unchanged from last month.

October 2021 MCI-EFI Survey Comments from Industry Executive Leadership:

Independent, Small Ticket
“I don’t feel a great deal of optimism looking forward. The supply chain bottleneck is likely to improve, and as it does, the general pick-up in the economy will follow.” James D. Jenks, CEO, Global Financing & Leasing Services, LLC

Independent, Middle Ticket
“We have seen strong new business opportunities over the last six months, so while our survey answers are ‘about the same,’ that’s because we have already seen the turn, and this level of activity is, in fact, very strong.” Bruce J. Winter, President, FSG Capital, 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:

Current business conditions
Expected product demand over the next four months
Access to capital over the next four months
Future employment conditions
Evaluation of the current U.S. economy
U.S. economic conditions over the next six months
Business development spending expectations
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.

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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: Charlie Visconage, cvisconage@leasefoundation.org

Q4 2021 Equipment Leasing & Finance Industry Snapshot Now Available

The Equipment Leasing & Finance Foundation has released the Q4 2021 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 new release:
• Overall, the Foundation projects the U.S. economy will grow by 5.3% in 2021.
• The U.S. economy expanded at a 6.7% annualized pace in Q2 2021 as business restrictions eased, mobility surged, and consumers unleashed spending across goods and services industries. Growth in Q2 was driven by a surge in consumer spending and business investment.
• Economic tailwinds for growth this year include:
o   Consumer financial cushion thanks to savings accumulated during the pandemic, which is keeping financial stress low as pandemic-era relief measures like the foreclosure and eviction moratoria expire.
o   Labor demand as a historic demand for workers and relatively low levels of hiring are leading workers to negotiate better pay and working conditions.
• Economic headwinds include:
o   Stalling consumer mobility with the increase of the Delta variant after a substantially improved spring and early summer. On a positive note, the Delta variant is not expected to depress mobility and spending as much as the virus did last winter.
o  Supply chain pressures across the world due to disruptions from COVID-related travel and work restrictions, especially in East Asian countries. Port closures and backlogs have been particularly disruptive to supply chains, causing major delays and cancellations that are driving up prices.
• Additional factors to watch include:
o   Fiscal policy uncertainty with Congress engaged in debates on various spending and budget items that carry serious economic, financial, and geopolitical consequences.
o   Concerns of persistently high inflation with historically high expectations among consumers and a significant share of businesses raising prices.
o   The trajectory of the pandemic if, despite the success of vaccines and some level of natural immunity among those recently infected, another surge occurs that would negatively affect consumer confidence and economic activity.
o   Monetary policy with Fed watchers expecting a slow return to tighter policy conditions later this year.
• Equipment investment growth will likely slow, though remain healthy throughout the rest of 2021. Equipment and software investment is projected to expand by a robust 13.2% in 2021, a strong recovery from last year’s pandemic recession.
•   New business volume growth reported in ELFA’s Monthly Leasing and Finance Index expanded 21% year over year in August. Strong business investment is expected to keep new business volume elevated through the rest of the year, though year-over-year growth may ease somewhat.

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

Media contact: Charlie Visconage, cvisconage@leasefoundation.org

Q4 Update to 2021 Economic Outlook Forecasts 13.2% Expansion in Equipment and Software Investment Growth and 5.3% GDP Growth

Washington, DC, October 13, 2021 – Owing largely to the burst of business activity in the spring and early summer that came in part thanks to rising vaccination rates, annual equipment and software investment growth of 13.2 percent is forecast for 2021, according to the Q4 update to the 2021 Equipment Leasing & Finance U.S. Economic Outlook released today by the Equipment Leasing & Finance Foundation. Annual U.S. GDP growth for 2021 is forecast at 5.3 percent. The Foundation’s report, which is focused on the nearly $1 trillion equipment leasing and finance industry, highlights key trends in equipment investment and places them in the context of the broader U.S. economic climate.

Scott Thacker, Foundation Chair and Chief Executive Officer of Ivory Consulting Corporation, said, “The Q4 update indicates that optimism eased somewhat as the spread of the COVID-19 Delta variant began weighing on consumer confidence and economic activity. The trajectory of the virus this fall and winter, inflation, and fiscal policy are the most significant unknowns to consider during the upcoming six months. Fortunately, the overall outlook portrayed in the Q4 update is more optimistic than it was a year ago. Businesses continue to invest despite supply chain issues and labor shortages, which bodes well for the equipment finance industry.”

Highlights from the Q4 update to the 2021 Outlook include:

Equipment and software investment rose 12.7 percent (annualized) in Q2 and is well above its pre-pandemic level. Business investment has remained strong despite emerging economic headwinds, though these headwinds could begin to weigh on investment later this year.
The U.S. economy expanded at a robust 6.7 percent (revised) annualized rate in Q2 2021, about the same pace as in Q1. GDP has now eclipsed its level from the end of 2019, just before the pandemic began.
The U.S. manufacturing sector continues to face historically high levels of demand, although growth decelerated over the last quarter. Meanwhile, U.S. industrial output has been constrained by ongoing supply chain issues and high input prices.
Business prospects for Main Street have been tempered somewhat since the summer as the resurgence of COVID has reduced consumer mobility, spending, and confidence. Small businesses are also contending with labor shortages, supply chain delays, and inflationary pressures, but are better equipped for headwinds due to healthy lending activity and a slow, steady rise in vaccination rates.
Federal Reserve officials largely maintain that ongoing inflationary pressures are mostly temporary. However, officials have signaled that the Fed is ready to begin “tapering” its asset purchases soon, which would translate to tighter financial conditions.
The spread of the Delta variant has dampened activity in some areas and has likely slowed economic growth significantly in Q3. Factors to watch for the rest-of-year outlook include concerns of persistently high inflation, uncertainty surrounding fiscal policy, the potential for tighter financial conditions that could impact equity markets, and the trajectory of the pandemic.

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. Eight verticals are showing signs of accelerating investment, and four other verticals are showing signs of peaking. Over the next three to six months, year over year:

Agriculture machinery investment growth may ease, though year-over-year growth will likely remain in positive territory.
Construction machinery investment growth will stay elevated.
Materials handling equipment investment growth should remain robust.
All other industrial equipment investment growth should remain elevated.
Medical equipment investment growth will likely remain in positive territory.
Mining and oilfield machinery investment growth should accelerate.
Aircraft investment growth will remain elevated, though may have peaked.
Ships and boats investment growth should remain healthy.
Railroad equipment investment growth should continue to improve, though upside potential may be limited.
Trucks investment growth should remain robust.
Computers investment growth should remain in positive territory and may even accelerate.
Software investment growth should remain elevated.

The full report of the Momentum Monitor is now available at https://www.leasefoundation.org/industry-resources/momentum-monitor/.

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 Q4 report is the third update to the 2021 Economic Outlook and will be followed by the publication of the 2022 Economic Outlook in December.

Download the full report at https://www.leasefoundation.org/industry-resources/u-s-economic-outlook/. All Foundation studies are available for free download from the Foundation’s online library at http://store.leasefoundation.org/.

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 individual and corporate donations. Learn more at www.leasefoundation.org.

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Media Contact: Charlie Visconage, cvisconage@leasefoundation.org

Equipment Finance Industry Confidence Eases Again in September

Washington, DC, September 16, 2021 – The Equipment Leasing & Finance Foundation (the Foundation) releases the September 2021 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 $900 billion equipment finance sector. Overall, confidence in the equipment finance market is 60.5, a decrease from the August index of 66.6.

When asked about the outlook for the future, MCI-EFI survey respondent Bruce J. Winter, President, FSG Capital, Inc. said, “The delta variant is causing some slowdown in certain sectors which will delay, but not derail the recovery of these industries. Other sectors that have seen strong demand but were unable to fulfill all orders due to severe labor shortages are optimistic more workers will return now that the federal unemployment bonus has expired. We expect a robust fourth quarter and are optimistic the momentum will continue into early next year. Future inflation remains the great unknown, and the outcome of the proposed $3.5 trillion infrastructure bill will be a key determinate in whether we experience only short-term inflation or several years of inflation well above the Fed’s target rate.”

September 2021 Survey Results:
The overall MCI-EFI is 60.5, a decrease from the August index of 66.6.

When asked to assess their business conditions over the next four months, 17.9% of executives responding said they believe business conditions will improve over the next four months, down from 35.7% in August. 71.4% believe business conditions will remain the same over the next four months, up from 64.3% the previous month. 10.7% believe business conditions will worsen, up from none in August.
21.4% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 32.1% in August. 75% believe demand will “remain the same” during the same four-month time period, an increase from 67.9% the previous month. 3.6% believe demand will decline, up from none in August.
32.1% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 28.6% in August. 67.9% of executives indicate they expect the “same” access to capital to fund business, a decrease from 71.4% last month. None expect “less” access to capital, unchanged from the previous month.
When asked, 28.6% of the executives report they expect to hire more employees over the next four months, down from 35.7% in August. 71.4% expect no change in headcount over the next four months, an increase from 64.3% last month. None expect to hire fewer employees, unchanged from August.
7.1% of the leadership evaluate the current U.S. economy as “excellent,” a decrease from 14.3% the previous month. 92.9% of the leadership evaluate the current U.S. economy as “fair,” up from 85.7% in August. None evaluate it as “poor,” unchanged from last month.
17.9% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 32.1% in August. 64.3% indicate they believe the U.S. economy will “stay the same” over the next six months, unchanged from last month. 17.9% believe economic conditions in the U.S. will worsen over the next six months, up from 3.6% the previous month.
In September 42.9% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 50% last month. 57.1% believe there will be “no change” in business development spending, an increase from 50% in August. None believe there will be a decrease in spending, unchanged from last month.

September 2021 MCI-EFI Survey Comments from Industry Executive Leadership:

Bank, Middle Ticket
“There is great interest in capital expansion in the industries we serve. Supply chain issues continue to delay equipment and the completion of projects. We will see this continue into next year and it will have an impact on when transactions end up on the books.” Michael Romanowski, President, Farm Credit Leasing

Independent, Large Ticket
“We always believe that secured equipment loans and leases will outperform all other asset classes; however, the last few months have created some concern among our customers. The shortage of labor, skilled or otherwise, has become problematic. Uncertainty with prospective polices coming out of Washington that could increase costs of doing business has slowed decision making ahead of any conclusion. Persistence of COVID variants and potentially renewed mandates and restrictions create even more uncertainty. While we try our best not to worry about what we cannot control, this environment feels unprecedented. Until we have clarity on a number of these concerns, we think the rest of this year and into 2022 will be somewhat choppy.” Dave Fate, Chief Executive Officer, Stonebriar Commercial Finance

ABOUT THE MCI

How is the MCI-EFI designed?
The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:

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

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Media Contact: Charlie Visconage, cvisconage@leasefoundation.org

Foundation COVID-19 Impact and Recovery Survey Shows Positive Portfolio Performance and Increased Staffing Levels at Equipment Finance Companies

Washington, DC, September 8, 2021 – The Equipment Leasing & Finance Foundation (Foundation) releases the results of its second quarterly COVID-19 Impact and Recovery Survey today which reveal equipment finance companies’ staffing performance, work-from-home expectations, and portfolio metrics, including deferrals, defaults, and originations. The COVID-19 Impact and Recovery Survey is designed to reflect longer-term effects of the pandemic’s impact on equipment finance companies going forward.

Among the survey highlights:

Staffing:
• Staffing levels are up, even vs. pre-COVID.
• Small-ticket lenders/lessors expect to have 14% more FTEs by January 1, 2022, than they did on January 1, 2020. Two-thirds expect a double-digit increase in staffing.
• Middle-ticket lenders/lessors expect a 7% increase.
• Large-ticket lenders/lessors expect a 5% increase.
• Banks and Independents both expect a 10% increase.
• Captives expect only a 3% increase.

Work from Home (WFH):
• Lenders of all types generally expect to be back in the office by 2022.
• 50% of Banks, 50% of Captives and 39% of Independents expect 0% or 10% WFH in 2022.
• Only 5% of Banks, 13% of Captives and 22% of Independents expect WFH to substantially continue for 75% or more of their employees.
• Overall, on average, 69% of staff were WFH at the beginning of 2021, and respondents expected more than half of those WFH to return to the office by beginning of 2022, reducing WFH to 31%.

Deferrals:
• At the peak of deferrals, lenders had about 8% of their portfolio in deferral. Overall deferrals are now down to 1.7%; for banks deferrals are down to 0.6%, Independents 3%, and Captives 8%.
• 10% of lenders never had any deferrals.
• 55% have no deferrals currently.
• 25% of lenders are still at their peak deferral percentage.

Defaults:
• Overall, default rates in 2021 are expected to be well below 2020 levels, and even below 2019 levels.
• Large ticket expectations for the 2021 default rate are even with 2019, at 0.17%
• Middle ticket expects 0.22%, well below the 0.38% seen in 2020.
• Small ticket expects a 0.37% default rate this year, not much more than half of 0.67% in 2020, and well below 0.58% in 2019.

Originations:
• Captives expect a 22% increase in originations in 2021 vs. 2019, the largest increase of any lender type. However, Captives saw a 14% decrease in 2020, as compared to 2019, so net growth over the two-year period would only be 4%
• Banks are expected to have double-digit growth in 2020 and 2021, amounting to 25% over the two-year period.
• Independents were flat in 2020, but expect to be up 17% in 2021.

“The data in the COVID-19 Impact and Recovery Survey provide valuable insights of industry performance by lender type and ticket size for companies to gauge their own results,” said Tom Ware, Foundation Trustee and Research Committee Chair. “Overall, the equipment finance industry appears to be coming through the pandemic stronger than ever, as indicated by metrics including expanding portfolios, positive portfolio performance and increases in new hires.”

COVID-19 Impact and Recovery Survey Comments from Industry Executive Leadership:

Bank, Small Ticket
“In the short term, the world-wide economy is recovering from the global pandemic of COVID-19. This means confidence in the stability of the markets is slowly recovering as supply chains slowly find a new path to stability. This directly affects the supply of commercial assets and their values. I think we will continue under these conditions through at least the end of 2021. Mid-term I think we will see pent-up demand released as product becomes available. Long-term, our industry will continue to adapt to new technologies, regulation, employee desires and customer needs to thrive. I believe the best is in front of us if we continue to innovate with broad vision and courage.” David Normandin, CLFP, President and CEO, Wintrust Specialty Finance

Independent, Small Ticket
“While the pandemic negatively impacted equipment finance originations in many market segments, as we begin to emerge from COVID restrictions and economic uncertainty, many businesses will be feeling more confident about capital spending and taking on additional debt. This should result in a notable increase in demand for our industry’s products and services over the next 18 months.” Nancy Pistorio, President, Madison Capital, LLC

“I see some slowdown as companies are assessing their needs and trying to determine their office space needs with employees now working out of office.” Steven Geller, Manager, Leasing Solutions, LLC

Bank, Middle Ticket
“Going forward I see our segment growing in the near and long-term future. I think near term we will continue to grapple with supply chain delays, but the need for financing will stay constant.” Marci Slagle, CLFP, President, BankFinancial, NA

Survey responses were collected from 64 equipment finance company executives from July 1-29, 2021. Results are available online at https://www.leasefoundation.org/industry-resources/covid-impact-recovery-survey/. All Foundation studies are available for free download from the Foundation’s online library at http://store.leasefoundation.org/.

Media contact: Charlie Visconage, cvisconage@leasefoundation.org

Equipment Finance Industry Confidence Eases in August

Washington, DC, August 19, 2021 – The Equipment Leasing & Finance Foundation (the Foundation) releases the August 2021 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 $900 billion equipment finance sector. Overall, confidence in the equipment finance market is 66.6, a decrease from the July index of 72.9.

When asked about the outlook for the future, MCI-EFI survey respondent Dave Fate, Chief Executive Officer, Stonebriar Commercial Finance said, “I have been optimistic on the near and long-term future of the equipment leasing and finance industry. As was proven out during 2020, secured loans and leases always outperform all other asset classes. In my opinion that will never change. My only concerns are things outside of our control, such as the potential increase in tax rates and the political landscape that exists today both at the federal and state levels.”

August 2021 Survey Results:
The overall MCI-EFI is 66.6, a decrease from the July index of 72.9.

When asked to assess their business conditions over the next four months, 35.7% of executives responding said they believe business conditions will improve over the next four months, down from 58.6% in July. 64.3% believe business conditions will remain the same over the next four months, up from 41.4% the previous month. None believe business conditions will worsen, unchanged from July.
32.1% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, down from 55.2% in July. 67.9% believe demand will “remain the same” during the same four-month time period, an increase from 41.4% the previous month. None believe demand will decline, down from 3.5% in July.
28.6% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, down from 37.9% in July. 71.4% of executives indicate they expect the “same” access to capital to fund business, an increase from 62.1% last month. None expect “less” access to capital, unchanged from the previous month.
When asked, 35.7% of the executives report they expect to hire more employees over the next four months, down from 37.9% in July. 64.3% expect no change in headcount over the next four months, an increase from 62.1% last month. None expect to hire fewer employees, unchanged from July.
14.3% of the leadership evaluate the current U.S. economy as “excellent,” a decrease from 27.6% the previous month. 85.7% of the leadership evaluate the current U.S. economy as “fair,” up from 72.4% in July. None evaluate it as “poor,” unchanged from last month.
32.1% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 48.3% in July. 64.3% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 51.7% last month. 3.6% believe economic conditions in the U.S. will worsen over the next six months, up from none the previous month.
In August 50% of respondents indicate they believe their company will increase spending on business development activities during the next six months, down from 51.7% last month. 50% believe there will be “no change” in business development spending, an increase from 48.3% in July. None believe there will be a decrease in spending, unchanged from last month.

August 2021 MCI-EFI Survey Comments from Industry Executive Leadership:

Bank, Small Ticket
“I think we are currently chopping wood and grinding through an abundance of liquidity, supply chain disruptions, ever narrowing margins, and competitive recruiting environments. This will continue for the near future, and our industry will adapt and find ways to win.” David Normandin, CLFP, President and CEO, Wintrust Specialty Finance

Bank, Middle Ticket
“We continue to see demand for equipment and facilities from our customer base. Customers are looking to take advantage of low-rate long-term funding. Business growth is solid, but is somewhat hampered by supply chain challenges.” Michael Romanowski, President, Farm Credit Leasing

ABOUT THE MCI

How is the MCI-EFI designed?
The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:

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

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Media Contact: Charlie Visconage, cvisconage@leasefoundation.org

Equipment Finance Industry Confidence Higher in July

Washington, DC, July 22, 2021 – The Equipment Leasing & Finance Foundation (the Foundation) releases the July 2021 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 $900 billion equipment finance sector. Overall, confidence in the equipment finance market is 72.9, an increase from the June index of 71.3.

When asked about the outlook for the future, MCI-EFI survey respondent Bruce J. Winter, President, FSG Capital, Inc., said, “Many industries served by the equipment finance segment are back to full throttle, with only certain negatively impacted industries still working towards recovery. This has created growing demand for our products and services and all signs point to increasing activity over the next few quarters. Inflation concerns, driven by unprecedented federal stimulus spending, are front and center and the jury is out as to whether the Fed has correctly forecasted only a short-term bump in inflation.”

July 2021 Survey Results:
The overall MCI-EFI is 72.9, an increase from the June index of 71.3.

When asked to assess their business conditions over the next four months, 58.6% of executives responding said they believe business conditions will improve over the next four months, up from 42.3% in June. 41.4% believe business conditions will remain the same over the next four months, down from 57.7% the previous month. None believe business conditions will worsen, unchanged from June.
55.2% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 51.9% in June. 41.4% believe demand will “remain the same” during the same four-month time period, a decrease from 48.2% the previous month. 3.5% believe demand will decline, up from none in June.
37.9% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 32.1% in June. 62.1% of executives indicate they expect the “same” access to capital to fund business, a decrease from 67.9% last month. None expect “less” access to capital, unchanged from the previous month.
When asked, 37.9% of the executives report they expect to hire more employees over the next four months, down from 46.2% in June. 62.1% expect no change in headcount over the next four months, an increase from 50% last month. None expect to hire fewer employees, down from 3.9% in June.
27.6% of the leadership evaluate the current U.S. economy as “excellent,” an increase from 22.2% the previous month. 72.4% of the leadership evaluate the current U.S. economy as “fair,” down from 77.8% in June. None evaluate it as “poor,” unchanged from last month.
48.3% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, a decrease from 51.9% in June. 51.7% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 48.2% last month. None believe economic conditions in the U.S. will worsen over the next six months, unchanged from the previous month.
In July 51.7% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 48.2% last month. 48.3% believe there will be “no change” in business development spending, a decrease from 51.9% in June. None believe there will be a decrease in spending, unchanged from last month.

July 2021 MCI-EFI Survey Comments from Industry Executive Leadership:

Bank, Small Ticket
“The volatility of business re-opening continues, and the struggle to maintain a consistent workforce and supply chain challenges are very real. As an industry, it will be valuable to lean on our heritage of being flexible and disciplined to ensure we continue to grow through this volatile environment and thrive with healthy performing portfolios as the economic environment improves.” David Normandin, CLFP, President and CEO, Wintrust Specialty Finance

Bank, Middle Ticket
“We are seeing good demand for equipment and structure financing to take advantage of the low-rate environment. The main headwind we are facing is supply chain challenges which has delayed delivery of new equipment and is impacting the completion of facility construction.” Michael Romanowski, President, Farm Credit Leasing

“Key is seeing equipment demand increasing, and we are optimistic about the second half of 2021. Frequently, we find we are competing against cash as often as we are another bank.” Adam Warner, President, Key Equipment Finance

Captive, Middle Ticket
“As the market landscape evolves, we continue to see equipment financing being used as a strategic tool to provide optionality. In the near term in the U.S., we’re fully focused on the opportunity in front of us.” Jon Biorkman, President, Healthcare Financial Services, GE Healthcare

ABOUT THE MCI

How is the MCI-EFI designed?
The survey consists of seven questions and an area for comments, asking the respondents’ opinions about the following:

Current business conditions
Expected product demand over the next four months
Access to capital over the next four months
Future employment conditions
Evaluation of the current U.S. economy
U.S. economic conditions over the next six months
Business development spending expectations
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.

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Media Contact: Charlie Visconage, cvisconage@leasefoundation.org

Q3 2021 Equipment Leasing & Finance Industry Snapshot Now Available

The Equipment Leasing & Finance Foundation has released the Q3 2021 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 new release:
• Overall, the Foundation projects the U.S. economy will grow by 6.1% in 2021.

• The U.S. economy expanded at a 6.4% annualized pace in Q1 2021, and has fully recovered from the historic 2020 recession. Growth in Q1 was driven by a surge in consumer spending, business investment, and government spending.

• Economic tailwinds for growth this year include:

o Consumer mobility, which has largely recovered to pre-pandemic levels due to falling infections and easing business restrictions, and spending of accumulated savings on pent-up demand for goods and services.

o Firms’ increasing their capital investment to increase capacity and improve productivity in the face of a tight labor supply and rising wages.

• Economic headwinds include:

o Snarled supply chains in some economic sectors, e.g., manufacturing, which are struggling to meet high consumer demand, in part due to the global semiconductor shortage.

o Depressed services exports which are still lagging comparable to 2019 levels.

• Additional factors to watch include:

o Expiration of federal enhancements to unemployment benefits in early September and how it will impact consumer spending and the labor market.

o Expiration of housing support that could lead to a wave of foreclosures or evictions later this year.

o Inflationary pressures and whether they will be transitory or sustained.

• Equipment investment is expected to grow at a healthy, though slowing pace for the rest of the year as businesses invest to recover or begin operations in response to strong consumer demand. Equipment and software investment is projected to expand by a robust 13.3% in 2021, the strongest year in a decade.

• New business volume growth reported in ELFA’s Monthly Leasing and Finance Index expanded 21% year over year in May. Robust business investment should keep new business volume elevated through the rest of the year.

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: Charlie Visconage, cvisconage@leasefoundation.org

Foundation Announces Scholarship Awards to Three Students

Washington, DC, July 20, 2020 –The Equipment Leasing & Finance Foundation (Foundation) announces that three outstanding students are recipients of The Equipment Leasing & Finance Foundation Scholarship, a program inaugurated in 2020 for students interested in potentially pursuing a career in the equipment finance industry. Each student will receive a scholarship of $5,000 for the 2021-2022 academic year. The Equipment Leasing & Finance Foundation Scholarship is part of the Foundation’s Academic Outreach Program.

The scholarship recipients are:

Dawson Jones, a finance major with a focus on supply chain management, set to graduate from the University of Maryland College Park in May 2022. He is currently an intern at Avascent, an aerospace and defense consulting firm. Jones previously completed an internship on Capitol Hill in the office of Rep. Andy Harris (MD-01).
Madison McCully, a finance major at Penn State University, is set to graduate in May 2022. She is currently interning with FNB in their Equipment Finance and Leasing Division and plans to pursue a career in the equipment finance industry upon graduation.
Jagatvir Singh, a business major at the University of Maryland College Park, is set to graduate in December 2021. In addition to his interest in the equipment finance industry, he works to develop strategies to improve deaf students’ success in academic and workplace settings.

“I’m delighted to congratulate Dawson, Madison, and Jagativr on being awarded Foundation scholarships, and on their exemplary academic accomplishments to date,” said Donna Yanuzzi, Foundation Trustee and Academic Outreach Committee Chair, and Managing Director of Sales and Marketing, FNB Equipment Finance. “The Foundation is committed to supporting the future talent of equipment finance and the scholarship program is an example of how our industry is paying it forward to make a lasting impact.”

The Scholarship Program is an outgrowth of the success of the Foundation’s Guest Lecture Program, a long-standing component of its Academic Outreach Program, in which industry professionals volunteer to lecture at colleges and universities about the equipment finance industry and its possible career paths.

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

Media contact: Kelli Nienaber, knienaber@leasefoundation.org

Q3 Update to 2021 Economic Outlook Forecasts 13.3% Expansion in Equipment and Software Investment Growth and 6.1% GDP Growth

Washington, DC, July 14, 2021 – As businesses across the country continue to invest during the post-pandemic recovery, annual equipment and software investment growth of 13.3 percent is forecast for 2021. Annual U.S. GDP growth for 2021 is forecast at 6.1 percent, according to the Q3 update to the 2021 Equipment Leasing & Finance U.S. Economic Outlook released today by the Equipment Leasing & Finance Foundation.

Scott Thacker, Foundation Chair and Chief Executive Officer of Ivory Consulting Corporation, said, “The Q3 update indicates that America is now opening for business quickly. The evidence illustrated in the Outlook points to a booming economy for the second half of the year as long as the pandemic remains in check, and despite several potential headwinds which must be monitored carefully. In the shorter term, strong growth for both the economy and the equipment finance industry are expected to be realized this summer.”

Highlights from the Q3 update to the 2021 Outlook include:

Equipment and software investment benefited from an 18 percent surge in Q1, and is well above its pre-pandemic level.
The U.S. economy expanded at a robust 6.4 percent (revised) annualized rate in Q1 2021, an acceleration from Q4 2020. Q1 GDP was just 0.9 percent below its level at the end of 2019, indicating that the economy exceeded its pre-pandemic level in Q2.
The U.S. manufacturing sector is still facing record levels of demand, even as the pandemic hamstrings key manufacturing centers around the world. However, industrial output in the U.S. has been constrained by acute shortages of key inputs and elevated prices.
Main Street has emerged from the pandemic having suffered less damage than many expected, in part due to historic federal relief efforts. Consumers are spending again, capacity limits and distancing requirements have largely been lifted, and the outlook is as bright as it has been since the pandemic began.
Federal Reserve officials have, for the most part, reached consensus agreement that inflation pressures will prove to be transitory. However, given the speed and magnitude of the economic rebound, the Fed has hedged a bit and signaled that rate hikes could begin in 2023.
While the outlook is mostly positive, notable headwinds remain, including two — supply chain issues and services exports — that stem from the rest of the world’s continued struggles with COVID-19 and comparatively slower vaccination push. Additionally, the risk of sustained high inflation and the expiration of federal support measures are key factors to watch this summer and fall.

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. Nine verticals are showing signs of accelerating investment after the pandemic-fueled collapse, and three other verticals are showing signs of peaking, although investment growth should remain healthy in the near term. Over the next three to six months, year over year:

Agriculture machinery investment growth is likely to decelerate.
Construction machinery investment growth should continue to strengthen.
Materials handling equipment investment growth will remain robust.
All other industrial equipment investment growth should continue to improve.
Medical equipment investment growth may have peaked, but should remain strong.
Mining and oilfield machinery investment growth should accelerate, though Y/Y growth rates may stay in negative territory.
Aircraft investment growth will continue to improve, but may also remain in negative territory.
Ships and boats investment growth should improve.
Railroad equipment investment growth may rebound.
Trucks investment growth could strengthen.
Computers investment growth should remain strong.
Software investment growth should remain robust and may even accelerate.

The full report of the Momentum Monitor is now available at https://www.leasefoundation.org/industry-resources/momentum-monitor/.

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 Q3 report is the second update to the 2021 Economic Outlook and will be followed by one more quarterly update before the publication of the 2022 Economic Outlook in December.

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 individual and corporate donations. Learn more at www.leasefoundation.org.

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Contact: Kelli Nienaber, knienaber@leasefoundation.org