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.
When 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.
- Bank 51.8%
- Captive 11.1%
- Independent 37%
Market Segments Based on Transaction Size of New Business Volume
- Large-Ticket (New Business Volume Avg. Transaction Size Over $5 Million) 11.1%
- Middle-Ticket (New Business Volume Avg. Transaction Size of $250,000 – $5 Million) 40.7%
- Small-Ticket (New Business Volume Avg. Transaction Size of $25,000 – $249,999) 48.1%
- Micro-Ticket (New Business Volume Avg. Transaction Less Than $25,000) 0%
- Under $50 Million 14.8%
- $50 Million – $250 Million 14.8%.
- $250 Million – $1 Billion 33.3%
- Over $1 Billion 37%