The Equipment Leasing & Finance Foundation (the Foundation) releases the June 2022 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 50.1, steady with the May index of 49.6.
When asked about the outlook for the future, MCI-EFI survey respondent Glenn Davis, President, RESIDCO, said, “Interest rates are a major concern. Uncertainties related to Fed action or inaction, as well as the continuing war in Ukraine will weigh heavily on the economy.”
June 2022 Survey Results
The overall MCI-EFI is 50.9, steady with the May index of 49.6.
- When asked to assess their business conditions over the next four months, 11.1% of executives responding said they believe business conditions will improve over the next four months, an increase from 6.9% in May. 55.6% believe business conditions will remain the same over the next four months, down from 62.1% the previous month. 33.3% believe business conditions will worsen, an increase from 31% in May.
- 11.1% of the survey respondents believe demand for leases and loans to fund capital expenditures (capex) will increase over the next four months, up from 10.3% in May. 66.7% believe demand will “remain the same” during the same four-month time period, an increase from 65.5% the previous month. 22.2% believe demand will decline, down from 24.1% in May.
- 2.2% of the respondents expect more access to capital to fund equipment acquisitions over the next four months, up from 13.8% in May. 77.8% of executives indicate they expect the “same” access to capital to fund business, a decrease from 86.2% last month. None expect “less” access to capital, unchanged from the previous month.
- When asked, 29.6% of the executives report they expect to hire more employees over the next four months, down from 48.3% in May. 66.7% expect no change in headcount over the next four months, an increase from 44.8% last month. 3.7% expect to hire fewer employees, down from 6.9% in May.
- 7.4% of the leadership evaluate the current U.S. economy as “excellent,” an increase from 3.5% the previous month. 74.1% of the leadership evaluate the current U.S. economy as “fair,” down from 79.3% in May. 18.5% evaluate it as “poor,” an increase from 17.2% last month.
- 7.4% of the survey respondents believe that U.S. economic conditions will get “better” over the next six months, an increase from 3.5% in May. 37% indicate they believe the U.S. economy will “stay the same” over the next six months, an increase from 27.6% last month. 55.6% believe economic conditions in the U.S. will worsen over the next six months, a decrease from 69% the previous month.
- In June 40.7% of respondents indicate they believe their company will increase spending on business development activities during the next six months, up from 34.5% the previous month. 59.3% believe there will be “no change” in business development spending, down from 65.5% in May. None believe there will be a decrease in spending, unchanged from last month.
- Bank 53.8%
- Captive 15.4%
- Independent 30.8%
Market Segments Based on Transaction Size of New Business Volume
- Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 11.5%
- Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 – $5 Million) 46.1%
- Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 – $249,999) 42.3%
- Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 0%
- Under $50 Million 15.4%
- $50 Million – $250 Million 23.1%.
- $250 Million – $1 Billion 19.2%
- Over $1 Billion 42.3%